Cable rises to test the 100 and 200-hour moving averages
Buyers are looking to seize near-term control of the pair again following a drop overnight after a report that the EU is looking to offer a 12-month Brexit extension to the UK. The reaction in the pound is a little delayed as liquidity remains thin at the moment but more wires are starting to pick up on the news in the London morning so that could be the reason why we're seeing some reaction now.
Cable has moved higher from 1.3080-90 levels to touch a high of 1.3123 as price runs into resistance from the key hourly moving averages. The 100-hour MA (red line) sits at 1.3112 while the 200-hour MA (blue line) sits at 1.3125.
If buyers can find a break above the latter, the near-term price bias will turn more bullish and we could see a return towards testing 1.3150 and then the 1.3200 handle later on.
That said, I wouldn't be surprised if European officials come out to deny the report later on today. After all, they wouldn't want to give anything away just yet before European leaders meet up next week on 10 April.
So, be mindful that any denial commentary could see gains reversed in the session ahead.
