Cable breaks out
Cable edged above the August range yesterday but has redoubled the effort today in a nearly 150 pip surge. The rally broke above the monthly high and the January high, which means the pair is now in the green year-to-date.
It’s been an impressive turnaround and even moreso given that the BOE’s Bailey today said they should have been more aggressive pre-COVID. It’s a hint they’re more-likely to keep policy loose for longer.
Technically, the obvious target here is 1.35 and the Dec high of 1.3514.
I’m a bit skeptical that today’s move was exaggerated by fixing flows ahead of the long UK weekend so tread carefully.
I noted at the start of the month that August is traditionally one of the weaker months, seasonally for the pound. That wasn’t the case this year. September is a tad stronger than average.
