The Cable – GBP/USD – seems to be ready to return to the 1.33 level, while the US Dollar remains under pressure after the recent comments of the Fed Official Kashkari, which has been not completely priced by the market yet.
At the time of writing the cross is trading @ 1.3270, making a modest +0.01% and the recovery of the Friday’s +50pips drop seems harder than expected. The upper move should certainly benefit from the actual USD weakness against his major peers fueled by the Fed uncertainty on the interest rate side.
Latest news coming from Minneapolis, moreover, have seen the Fed official Kashkari adding fuel to the fire, facilitating the Cable upper move and renewing the downside pressures to the Greenback.
The positive movement of the cross however, still remains limited by the persistent risk-off of the market, which is weighing on high-yield currencies (just like GBP). This week promises to be very interesting for major currencies, with UK CPI datas and the BOE decision, while in US it will be interesting to see the retail sails data.
Interesting levels to keep an eye on see the first immediate resistance for the Cable positioned at 1.3290 (5-DMA) beyond which the cross could go touching the 7 September high at 1.3334.
On the opposite side, the first level to consider is certainly at 1.3223 (20-DMA) which could be a support for a rebound.