There aren’t any major headlines to have dragged the pair lower but it comes against the backdrop of a modest performance by the dollar today. Of note, the antipodeans are dragged much lower after Australia’s softer monthly CPI data – which surprisingly saw a strong bounce in AUD/NZD off its 100-day moving average and 1.0800 mark.
Anyway, going back to cable, things are certainly getting interesting now as the near-term chart would suggest below:
GBP/USD hourly chart
The recent upside move has stalled just at around 1.2800 and there has been a bit of consolidation since. However, price action has slipped back below its key hourly moving averages and that is giving sellers some incentive to search for a push lower next.
The 200-hour moving average (blue line) in particular is limiting the upside move over the past week, with some help from the 100-hour moving average (red line) at times. But in essence, sellers are leaning on either one or the other to keep the downside momentum going.
However, they are unable to breach the near-term support around 1.2685-90 and that will be a pivotal line in the sand to watch out for in the second half of the week.
If that gives way, there could be added downside for cable to come. But keep above that and buyers will still have some stake in the game to work with before seeing the move higher earlier this month completely unravel.
As an aside, do keep an eye out on risk sentiment in broader markets as that also tends to have some impact on the mood in cable more often than not.