Cable builds for breakout toward 1.3600

Bearish outlook holds as PMI miss fuels Fed cut bets

The U.S. Dollar remains under pressure following Monday’s disappointing ISM Manufacturing PMI data, which printed at 48.5. The weaker data has triggered further downside momentum for the greenback.

Four-hour

The Dollar is currently trading between 98.694 - 99.129 and currently testing the 4-hour fair value gap resting at 99.112 - 98.871. Unless the dollar reclaims this zone with strong bullish conviction, the trend favors continued downside. This was already forecasted yesterday: Daily fair value gap supports GBP, incoming new highs ahead.

DXY bullish scenario

If price reclaims 99.129 and closes above it on strong momentum, the Dollar Index could attempt a short-term relief rally toward the 99.60–99.80 zone. This would likely require a stronger-than-expected Non-Farm Payrolls print or a shift in tone from Fed speakers later today.

DXY bearish scenario

A rejection from the 98.694–99.129 FVG followed by a break below 98.20 would likely trigger another leg lower toward the 97.921 support zone. Momentum remains to the downside as long as price stays beneath the key imbalance. A weak NFP figure on Friday could accelerate this move, especially if wage growth also cools.

GBP/USD materializes bullish bias

GBP/USD is trading higher this week as broad-based dollar weakness supports the pair. The pound has bounced firmly off the recent 1.34400 support and is now approaching the upper range of its consolidation zone.

Four-hour

With the 4-Hour FVG resting at 1.35052 - 1.35265 supports pound and dollar weakness is still evident, for a bullish scenario, we’d like to target the next high at 1.36 level. Unless the 4-Hour FVG holds, downside risk is still on the table as we await NFP this week.

A break above 1.356 level could spark a renewed momentum to the upside for the pound.