Foreign Exchange traders are preparing for a few lively sessions today before they can finally put their feet up at the end of a long week, and Cable traders may have even more to keep them occupied than their counterparts on other desks. Cable has dropped over 3% since last week’s US election, primarily due to dollar strength. This downward move has been compounded by an unexpected rise in the unemployment rate on Tuesday, which saw the pair break through long-term support levels. Today, GDP figures are set for release early in the London trading session, and another poor result could place further pressure on the pound, potentially allowing Cable to push lower and challenge the annual low.
Expectations are for both the month-on-month headline figure and the quarterly preliminary figure to show a 0.2% increase. Any print below this could see last night’s low tested swiftly, with further downside likely, as multiple lows hover just above. A stronger figure could trigger some buying in the market and prompt profit-taking on short positions, especially on a Friday with potential event risk over the weekend. However, most traders are expected to stick with the recent trend and anticipate that any significant rallies will be met with strong selling in the current dollar-positive environment.
Resistance 2: 1.2947 – Trendline Resistance
Resistance 1: 1.2858 – 200-Day Moving Average
Support 1: 1.2627 – Overnight Low and Trendline Support
Support 2: 1.2296 – 2024 Low
