The downdraft continues for cable this week
It is tough to fight the momentum in the dollar currently and from a technical perspective, it isn’t wise to as we are seeing the greenback push to fresh highs against major currencies after more than a month of consolidation.
The post-Fed move in cable is extending as the pair now falls to a low of 1.3873 with the break of the 100-day moving average (red line) a significant one.
The drop below that and 1.3900 leaves little in the way of a push towards 1.3800 next but sellers may look to push the agenda to the March and April lows around 1.3670.
The consideration for the post-Fed move is that it is a game changer for the market – not to mention the dollar – since Powell & co. decided to cave in after months of touting patience and that they will stand their ground instead.
The bond market is keeping a more relaxed approach but the dollar is moving in a big way and with the market already considerably short on the greenback (pound is also at stretched levels), cable is vulnerable to a deeper correction.