Fundamental Analysis
The US Dollar dominated the pair during yesterday’s session amid trade war fears and the risk of virus resurgence.
BOE’s Chief Economist Andy Haldane warned that the pandemic will leave permanent scars on Britain’s economy as households and businesses cut back spending, weighing on the Sterling in the long-term.
Also weighing on the Cable could be the uncertainty surrounding the on-going Brexit talks wherein the EU negotiators are accused of politicizing the UK’s financial services sector.
In the short-term, we could see a bounce on the pair amid a probable plunge in the US inflation data, however that will likely be a great opportunity to sell the Cable from higher prices.
Technical Analysis
The Cable broke below the 200-period SMA yesterday and found support around the 1.23 level.
The Double Top formation remains valid and it will be confirmed once price breaks below the pivot support area (1.22-1.23).
Support: 1.23 / 1.22
Resistance: 1.25 / 1.2640
