A tough week for sterling as soured Brexit deal expectations weigh, but upcoming key support and oversold technical signals suggest a short-term respite.
UK-EU trust hit all-time low's for Brexit negotiations as the UK government insists on rewriting the Withdrawal Agreement nL8N2G713X.
The Times carries a story saying that dozens of Conservative law makers are preparing a revolt on the issue Click here , but even if successful, it would not heal the rift in trust between the negotiating teams.
Cable has fallen 3.6% and EUR/GBP is up 3.6% from Friday's NY close, so this has been a sterling move.
The Morgan Stanley FX Positioning Tracker on September 7 showed the largest longs in the G10 were held in EUR and GBP, so unwinding stale GBP longs likely a major factor.
Technically for cable, 5, 10 and 21 daily moving averages are falling, as 21 day Bollinger bands expand, which is a bearish setup.
Cable is poised above significant support at 1.2721-1.2137, being 61.8% June-September rise and the 200 daily moving average.
Meanwhile the lower 21 day Bollinger band, which is a very good indicator of an oversold market comes in at 1.2831.
The charts suggest that cable may pause for breath, which favours selling bounces rather than breaks.
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