In a significant turn of events, the GBP/USD pair, often referred to as ‘Cable’, reversed sharply to the downside in the last 24 hours. This movement was characterized by the price decisively breaking through the corrective channel’s support line, signaling a strong bearish momentum among traders. The current landscape suggests a bearish impulse in progress, likely to extend as market conditions mature.
As of now, the minor rally that we’re witnessing is classified as Red Wave 4, based on Elliott Wave analysis. It’s essential to consider this as a corrective phase within a larger downtrend. Analysts are pinpointing potential resistance levels, notably at 1.2560 up to 1.2580. Traders should be cautious around these levels, as they may herald the next leg down if the bearish thesis holds true.
Adding to the complexity of Cable’s movements, the market has factored in the shifting sands of monetary policy. The Bank of England’s rate cut bets have plunged below 50 basis points for the current year. This adjustment follows the release of U.S. inflation data, which came in hotter than anticipated.
