Cable (1.5408) rose slightly overnight, with traders unwilling to make bets ahead of non-farms.
Technicals:
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Trend: Daily lower; Weekly higher.
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Overbought/Oversold (stochastics): Daily oversold; Weekly overbought.
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Support/Resistance Levels: Resistance lies at 1.5999 (Aug6 high), 1.6284 (Jan22 high), 1.6458 (Jan19 high), 1.6479 (61.8% retracement of Nov to Dec decline), 1.6722 (Dec 3 high), 1.6878 (Nov16 high) and 1.7043 (Aug high). Support lies at 1.5327 (Aug31 low), 1.50 (psychological), 1.4949 (Jun12 low), 1.4239 (May19 low) and 1.3503 (Jan’09 low).
Positioning:
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The risk reversal (3m, 25delta) ticked higher overnight with the move in spot. The recent retreat from the upper end of its six-month range is consistent with recent decline in GBP/USD.
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Implied Vol (3mo) fell overnight, and it is consolidating in the lower third of its six-month range
Cross-asset valuation: The significant correlates over the past two months for GBP/USD have been the DXY (negative) and EUR/USD (positive).
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