The Cable saw an increase in its value on Monday, reaching a new high for the year just below the significant 1.30 level. Over the past two weeks, the pair has been on a strong uptrend, but it seems that bulls might be losing momentum as they approach the 1.30 resistance. Daily studies indicate that the market is overbought, with the 14-day momentum indicator showing a downward turn from high levels in positive territory.
Investors are eagerly anticipating a speech by Fed Chairman Powell later today, hoping for more clarity on the central bank’s monetary policy. Recent data indicating a return in inflation levels towards the 2% target has also fueled expectations for a rate cut in September. However, Powell’s statements will be crucial in confirming this trajectory as the July 30/31 policy meeting nears.
The attempted assassination of former US President and presidential candidate Donald Trump over the weekend has reverberated through the markets, potentially influencing market performance. While technical analysis points to potential reversal signals and a pullback, the focus remains on key events such as Powell’s speech and UK inflation data due on Wednesday to determine the near-term direction of the Cable.
In a bearish scenario where the 1.30 barrier acts as a resistance, the price could retreat towards sturdy support levels at 1.2860/30, consisting of the June 12 former high and rising 10-day moving average. Conversely, a sustained breakthrough of the 1.30 pivot could pave the way for further upside momentum, targeting levels around 1.3100/41, including the round-figure and the peak from July 14, 2023.
Overall, while technical indicators suggest a potential pullback, the fundamental factors, including Powell’s speech and economic data releases, will continue to guide the movement of the Cable in the coming days. Investors should remain vigilant and consider all aspects before making trading decisions in this volatile market environment.
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