Sharp turnaround in cases has been a tailwind
The combination of better risk sentiment since the rout last Monday and the shockingly quick turnaround in UK covid cases continues to spark a remarkable turn in cable.
With the help of some fixing demand and a squeeze on shorts, the pair has soared 70 pips today to 1.3886. I expect some of the latest move to fade as the fix fades but it’s rejected the March/April double bottom in a big way after a false breakdown.
The key hurdle now is July high of 1.3910. Given the quick move in the past hour, it’s not set up for a break now but it will be a spot to watch after some consolidation.