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Aug 31 - 09:55 PM

GBP/USD - COMMENT-Cable Heads Toward 1.3500, With The USD Friendless

By Andrew M Spencer  —  Aug 31 - 09:15 PM

Sterling has been rising against the USD since late June, and despite weak UK fundamentals, the technical charts suggest cable has further to run.

The UK has struggled to contain the coronavirus, and cases remain elevated -see chart.
The economy has been hit hard by COVID-19 and a tough winter looms nL8N2FS4Q1nL8N2FT3G8.
Economists believe a no deal Brexit will hit the UK economy, and talks remain stalled nL8N2FX1FT, but the door remains open for a deal nL8N2FU2UJ.

USD weakness is driving cable higher, caught in a 'double whammy', as upbeat U.S. economic news dents the safe haven appeal of the USD, and bad economic or geopolitical news is also taken as a reason to sell the USD.

Technically daily and weekly momentum studies, 5, 10 & 21 moving averages climb, which is a positive setup.
21 day Bollinger bands expand, which often happens in a trending market.
The 1.3357 upper Bollinger band, which is a good indicator of an over stretched market, suggests GBP/USD is overbought short term, but a test of 1.3516 2019 high is viable in coming days.
A sustained break of the 1.3150 21 daily moving average is needed to end the topside bias.

For more click on FXBUZ


cov sep 1 Click here

gbp 2 sep 1 Click here

Source:
Refinitiv IFR Research/Market Commentary

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