- Post NFP, we saw overreaction from the market. Job numbers may have been good, but wage inflation was down.
- After the move up, sellers started to come in mid-week with Powell’s testimony as the catalyst for the momentum shift and price has returned below the weekly trendline.
- The general expectation now is for a rate cut and consistent weak data leading up to the next FOMC meeting would provide a strong case for this. Dollar is seasonally weak in July so look for selling to continue this week. The data releases will likely to give some choppy moves especially if actuals come better than expected.
- After a break below the December 2018 swing low, exhaustion set in, price bounced off the lower daily trendline and buyers took over.
- Cable performs quite well in July so look for the rally to continue. Commercials also further increased long positions with the 36 Month COT index at 85%.
- Resistance levels are marked on the chart. A strong move up this month would give a nice opportunity to sell in August which is the weakest month for pound.
- A confirmed lower high last week signalled a change in daily trend and we are looking at a potential H&S as price approaches the neckline.
- Look for intraday sell setups all the way down to the Monthly S2 Pivot and weekly / long term trendlines.