The good start to the week for cable is a distant memory as today’s decline extends to 100 pips and breaks below 1.2000. That takes it back to last Wednesday’s levels.
For bulls, I would eye the 1.1967 level as support, which is the 50% retracement of the rally since last Monday. A series of old highs also clocks in around there.
Bears could eye much lower levels with the November uptrend likely to break and the month ending. I’d eye 1.1640 as an initial target.
As for the trigger for the latest round of risk aversion, it’s not clear but I’m inclined to lean towards month end. Yields are also creeping higher and that could be behind the latest push of broad USD strength.