The move lower in cable has largely been a function of the dollar’s ascendency, and with key levels in the form of the 200-day moving average breaking down, downside momentum has picked up, with a trip to the summer's lows a possibility.

The UK employment report was predominantly a mixed bag with a larger than expected uptick in the unemployment rate countered by elevated pay growth.
Overall, the data does little to change the BoE outlook where policymakers continue to maintain a cautious stance to cutting the bank rate.
That said, the key focus going forward will be on the U.S. CPI report where the biggest mover is likely to stem from a large topside surprise.

On the technical front, cable is set to close below its 200-day MA – the first time since April 1 – which leaves the pair in a precarious position.
Looking back at data since 2000, the 30-day mean average return in cable stood at -0.5% with the median average at -0.8% following a sub-200-day MA close.
Consequently, this opens the door for a test of the summer's lows at 1.2666 and 1.2615.

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