Early sign of a turnaround in cable

By: Adam Button

I would call today's price action in cable a potential warning sign. I have been bearish on the pair since the spike reversal above 1.63 at the start of 2013 and have repeatedly reaffirmed it. Today's decline to the lowest since August has been wiped out. In order to confirm that the downtrend is ended, a rebound at least above 1.5730 is necessary in the day ahead. The catalyst could be the Bank of England growth forecast tomorrow. The market is expecting the BOE forecast of 1% growth in 2013 to be lowered. It may not be as bad as feared and that could set off a round of short covering.