Can Cable's weak rally maintain altitude ?
Sterling (GBPUSD) firmed up a bit on the back of today’s UK Average Earnings and Unemployment data, which came in pretty much as expected, albeit with a slight rise in the claimant count. However the reaction doesn’t feel like it has any conviction to it, and the Daily Charts point to Sterling approaching a junction. Although the trend has been broadly bullish, the resistance to any rallies has rather stifled progress. Whilst we are of the medium-term view that the best way to extract value from Sterling is to buy dips, the lack of momentum here is starting to look ominous. Without doubt, the fate of Sterling is now in the hands of the politicians, and if that isn’t a terrifying prospect then it’s difficult to know what is. The Daily Chart is forming a steep resistance line coming in around 1.3110/20 with a shallower (and better defined) support 100 points lower. A breakout is inevitable and the loss of liquidity at the end of this week may prove critical, so if anyone has exposure to this product they should be watching very closely and manage Stop Losses appropriately.