The drop below 1.3800 spells out some danger for cable

Technical Analysis

GBP/USD under technical pressure below 1.3800

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The range for today remains a bit more subdued going into European trading but the pair is now holding near the lows @ 1.3753 with the dollar keeping steadier so far.

The firm break below 1.3800 yesterday was the first since April and from a technical perspective, it doesn’t leave much in the way of a push towards the double-bottom in March and April near 1.3670 next.

That said, with the US jobs report in focus, any downside acceleration may be more tentative for now so keep an eye out on how the technical side of things play out.

For buyers, getting back above 1.3800 is necessary to try and dissuade sellers from keeping the downside momentum after yesterday’s break.

Otherwise, if the dollar can catch a second wind from the payrolls release later, that may see the lows pointed out above called into question with the 200-day moving average (blue line) lined up next @ 1.3637.

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