Cable is trading a little higher to 1.2290 levels currently
The pound has nudged a little higher to start the session, but it isn’t really amounting to much. Keeping below 1.2300 will be good for sellers but they are not under any major threat for the time being after the UK data deluge earlier.
The data was better-than-expected for the most part but just be reminded that April and Q2 conditions are going to be much worse considering that the UK only went into strict lockdown on 23 March.
Not to mention that conditions at the start of Q1 also got a boost from post-election euphoria, which has long faded away and will not see a recurrence this quarter.
In fact, with Brexit risks mounting, that will deter business investments even more alongside an uncertain path to recovery from the coronavirus crisis.
To sum up, sure the data releases were ‘not as bad’ but they don’t point to much optimism either when you factor in all the other circumstances at play.
As for cable, buyers can lean on some support from the 21 April low @ 1.2248 for now but they have more work to do as the 100-hour moving average is a distance away at 1.2352.
That will be the first key level that buyers have to work their way towards in order to try and establish some near-term control in the pair.
As for sellers, the first key challenge is to get past the 21 April low @ 1.2248 before targeting the 1.2200 handle and the 7 April low @ 1.2166.