Dollar index flat on the day now and moves back above the 200-hour MA
The continued bounce in the dollar is seeing cable move to session lows of 1.3209 currently with other major currencies also paring gains against the greenback.
In particular, sterling is also seen reversing its gains across the board falling against the rest of the major currencies as well. Cable touches a low of 1.3201 on the day with bids near the 1.3200 handle keeping it up for now.
At the same time, the move is a bit of a broad-based dollar wave as well with USD/JPY up to session highs of 112.57 while EUR/USD is flat on the day now at 1.1711. Meanwhile, USD/CAD also touches a high of 1.3154 on the day.
It's a painful hit for sterling despite the fact that an August rate hike by the BOE is still very much on the cards. I don't expect the dip to amount to a windfall given that said fundamental is still in play, but for now the technical picture in cable doesn't look good.
A fall below the 100-hour MA (red line) puts sellers back in the driver's seat and the 1.3190-00 level will be a key near-term area to look out for support. Beyond that is a move towards the 4 July low @ 1.3171 followed by lows near the 1.3100 handle as key support levels to look out for.
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