The pound is doing its thing again where it is acting more like an emerging market currency, moving more strongly with risk flows and the general dollar momentum on the day. GBP/USD has seen a fair tumble from 1.2500 to 1.2430 in the past few hours.
The drop mainly comes amid broader dollar strength across the board, spurred on by USD/JPY closing in on the 133.00 level as the bond selling continues to be a key focus in the past few trading sessions.
Cable buyers were looking for some reprieve late last week and early this week but have found it tough to break through the key hourly moving averages, as seen with the above chart (circled areas).
Instead, price action is keeping below the key hourly moving averages as sellers establish more near-term control and we are seeing a drop to fresh lows in nearly three weeks now. The 50.0 Fib retracement level at 1.2411 will be the next key technical level to watch.
But as long as risk tones remain more dour, it is tough to see the pound fight back against the dollar. Not least with the Fed still aggressively tightening policy and the BOE looking like they may jump off the bandwagon soon enough.
The latest fiasco surrounding Boris Johnson's position as prime minister also isn't helping with pound sentiment. He may have won the vote to stay on but the damage in confidence has been done. The lack of political credence is something that won't give buyers much assurance despite it being not so much of a major factor these days.
