GBP/USD trades little changed as slight gains earlier turn flat
The climb in the pair yesterday was mostly helped by a weaker dollar as buyers reclaimed the 1.3700 level but the momentum is stalling at the moment.
From a technical perspective, the bounce off levels near 1.3600 has some hints of a double-bottom but there is further resistance closer to the 200-day moving average (blue line) at 1.3788 and the 1.3800 level for the time being.
But before getting to that, buyers also still need to work through key near-term levels:
The 200-hour moving average (blue line) has helped to limit gains quite a number of times already this month and with price action caught in between the key hourly moving averages now, it sets out the battleground for near-term direction.
As mentioned yesterday, the pound side of the equation is unlikely to provide much fresh impetus for a move higher so a lot will depend on the dollar this week.
Nothing gets any bigger than Jackson Hole and perhaps until then, we may be caught in a bit more of a push and pull unless there is a dollar positioning play leading up to the key risk event on Friday.
If that happens to be the case, the key levels outlined above are ones to watch in case we see the dollar become a little more stretched on either side.
For now though, cable is caught in the middle of sorting out which direction that will be.
Given yesterday’s reaction and expectations going into Jackson Hole now, perhaps risks are skewed towards a softer dollar positioning. However, the technicals will dictate the state of play going into Friday so let’s see what that has to offer in the days ahead.