The cable maintained its bullish tone on Monday, reaching a new yearly high just below the psychological barrier of 1.30. However, after a strong advance in the past two weeks, bulls may start to lose traction as they face resistance at the 1.30 level. Daily studies suggest that the market is overbought, and the 14-day momentum indicator is beginning to turn south from very high levels in positive territory.
Market participants are eagerly anticipating a speech from Fed Chairman Powell later today. They are hoping to gain more insight into the central bank’s future monetary policy decisions. Recent data has shown that inflation is trending back towards the 2% target, leading to expectations of a rate cut in September. However, Chief Powell must confirm this in one of his final speeches before the July 30/31 policy meeting.
Recent events, such as the assassination attempt on former US President and presidential candidate Donald Trump over the weekend, have sent shockwaves through the markets. This unexpected event may continue to impact market performance in the near future.
While technical studies are pointing towards initial reversal signals and a potential pullback, it is likely that fundamental factors will play a more significant role in determining the cable’s near-term direction. Powell’s speech today and UK inflation data scheduled for Wednesday could have a major impact on the cable’s movement.
In a bearish scenario where the cable is rejected at the 1.30 barrier, the price may fall towards strong support levels at 1.2860 and 1.2830. Conversely, a sustained break above the 1.30 pivot could lead to further gains, with targets at 1.3100 and 1.3141 in sight.
Overall, the cable’s outlook remains uncertain as market participants await key events and data releases that could shape its future trajectory. Traders should remain cautious and monitor both technical and fundamental factors closely to make informed trading decisions.