The cable bursts
Cable broke the August range yesterday, but stepped up its efforts today with a surge of nearly 150 pips. The rally broke through the monthly high and January high, meaning the pair is now in the green since the start of the year.
It was an impressive turnaround and even more so given that BOE’s Bailey said today they should have been more aggressive before COVID. This is a clue that they are more likely to keep the policy loose longer.
Technically, the obvious target here is 1.35 and the December high is 1.3514.
I’m a little skeptical that today’s decision was overstated by fixing the feeds ahead of the UK long weekend, so be careful.
I noted at the start of the month that August is traditionally one of the weakest months, depending on the season for the pound. This was not the case this year. September is a little stronger than average.