Cable falls to one-week lows on the day as the dollar strengthens
Following a break below the 200-hour MA (blue line) in yesterday's trading, price has continued to trend lower and is now testing minor support @ 1.2846 from last Wednesday's low. Beyond that, there is the Monday low @ 1.2829 before a test of the 1.2800 handle will be on the cards.
The thing about the moves here is that it is not tied to just one chart. Much like how the dollar gave way and fell since mid-August, we're seeing a similar pattern here among the major charts. In EUR/USD and USD/JPY, price is siding with dollar bulls as near-term momentum breaks the 100 and 200-hour moving averages to side with them. And it is a similar case here as well.
That's a pretty strong signal across the board that momentum is starting to return back to the dollar. The breaks are pretty recent so there's still a lot of work to be done in order to establish a clear run but this is a good start for dollar bulls to get back on the horse.
Also, the great thing about momentum trading in situations like these is that risk can clearly be defined and limited now by those hourly moving averages.
Back to cable, with Brexit woes still causing problems for the pound it's hard to see the currency pull off any sustained rallies unless something fundamental changes in Brexit talks. And that is the major drag right now for cable as even economic data has been a bit soft (today's BRC retail sales showed the weakest growth since November 2017).
Near-term bias is clear but sellers will feel a lot more comfortable if price moves below 1.2842 in my view. That's where support comes in from the 100-bar MA (red line) on the 4-hourly chart. Move below that a move towards 1.2800 will be eyed for once again.