GBP/USD - 1.3534. Although cable met active selling ahead of Asian open on Thur FM 1.3559 (AUS) n tumbled to session lows of 1.3491, active cross-buying in sterling lifted price to 1.3558 in NY morning b4 moving sideways later.

On the bigger picture, despite cable's brief break of 2016 post-Brexit low of 1.1491 to a near 35-year trough of 1.1412 in mid-Mar 2020 on safe-haven USD's demand following free fall in global stocks, price rallied to 1.3686 on the last trading day of 2020 following a last-minute EU-UK trade deal, then to a near 34-month, 1.4241 peak in late Feb suggests a major low is made. Despite hitting a 3-year peak of 1.4250 on Jun 01, selloff to as low as 1.3162 in Dec signals long-awaited correction has occurred. Having said that, cable's impressive rally to as high as 1.3550 last Fri confirms temporary low is made n daily close abv 1.3607 may head to 1.3708 but 1.3706 (50% r) should cap upside.

Today, cable's retreat FM Wed's 7-week 1.3599 high to 1.3491 suggests recent up move has possibly made a temp. top n consolidation is in store, below 1.3491 would add credence to this view n yield a stronger retrace. to 1.3460, reckon 1.3431 may hold. Only abv 1.3599 risks 1.3608 but 1.3633 should cap upside.

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AceTrader Team

AceTrader

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