After the turmoil of the Liz Truss leadership, sterling has settled down and the doomsday short-sellers have mostly been stopped out of the market. The outlook for the UK economy remains bleak and of all the major currencies, this is the one with the most significant downside in my opinion. Whether this weakness manifests itself against the USD or more on the crosses remains to be seen.
For now I am betting that a rebound top has been formed at 1.2450 and that we start to head lower again in cable. Levels between 1.2150/1.2250 provide the obvious short-term selling zones.
Support should initially be strong around 1.1650 but even a test of this level would confirm the rebound top to me and strengthen my ‘sell rally’ resolve.