Cable has come under pressure overnight because of relatively good US retail sales figures.

The FX rate, which has been building a short-term floor at 1.350, is currently trading at 1.348, indicating sustained dollar buying. In fact, as the US 10-year Treasury yield hit 3.05% (higher interest rate attract savings flow), global capital are flocking into the greenback. For example, the Euro has dropped from 1.24 to 1.80 in the past few weeks. Many emerging currencies are under huge selling pressure.

So for GBPUSD to regain the upside initiative (back above 1.4000)  would require a repositioning of the long-dollar trade. Currently, traders are expecting to the US central bank to follow through its intentions of 3-4 hikes in 2018.

The next support for GBPUSD is at 1.33.

 

Jackson has over 10 years experience as a financial analyst. Previously a director of Stockcube Research as head of Investors Intelligence providing market timing advice and research to some of the world largest institutions and hedge funds.

Expertise: Global macroeconomic investment strategy, statistical backtesting, asset allocation, and cross-asset research.

Jackson has a PhD in Finance from Durham University.