Cable up 53 pips
Cable has wiped out the drop from yesterday that came on a report that German officials had brushed aside Theresa May's latest Brexit plan. The climb was helped by today's UK data showing unit labor costs jumping to 3.1% y/y from 2.1% and broad dollar weakness after non-farm payrolls.
There's a push-and-pull ongoing in sterling at the moment. The economic numbers have been better and the central bank more hawkish but that's balanced by Brexit negativity.
Ultimately, I think the economy wins out from here because cable is so beaten down but you have to be prepared for the kind of 70-pip headline we had yesterday.
On the daily chart, however, there is some congestion and technical resistance around 1.3300 that will need to be cleared before the risk-reward of buying makes sense.
