US dollar climbs to the highs of the day
Cable has fallen through a cluster of lows near 1.3800 in a second day of heavy selling.
The moves are all about the US dollar with the decline in cable in-line with most other USD trades.
The dollar is benefiting from a bid in bonds and what appears to be a flow-driven trade that’s been relentless since the US returned from holiday.
The move is a tough one to square given the fresh highs in stocks. The bond market is signaling no worry about inflation and the latest US economic data (aside from payrolls) hasn’t been strong.
This is the time of year when you just have to trust in price action and technicals and a chart like the cable one above is saying that more selling is coming.