Cable eases below key near-term level, but still ‘playing in the range’

Cable sits a little lower on the day, near 1.2450 currently

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The pair has eased back under its 200-hour MA (blue line) during the session as the dollar keeps a little firmer so far today. That is seeing the near-term bias turn more bearish but price action remains sticky around 1.2450 for the time being.

Despite the mild drop, the pair is still largely stuck in a range over the past few sessions as highlighted above. Any topside move is failing to firmly keep above 1.2500 with near-term resistance seen close to the 100-hour MA (red line), currently @ 1.2514.

Meanwhile, downside support is seen closer to the 1.2400 level with the 50.0 retracement level @ 1.2407 also providing an area for buyers to lean on in the meantime.

Much like other dollar pairs, cable seems a bit caught between two minds at the moment. While there is scope for dollar demand on financial strains, risk has been managing to stave off any major selloff to warrant a stronger bid in the greenback.

The risk mood today is a little more mixed with European stocks keeping slightly higher while US futures are actually trading lower at the moment. If anything, it appears that investors are still indecisive about how to react to recent developments.

On the one hand, lockdown measures are starting to ease in Europe and potentially the US but there are still lingering concerns. Will there be a secondary outbreak? How long will it take before things start to settle into the new “normal”?

Meanwhile, the longer the economic strain continues, that will have implications on financial risks as well. That said, the Fed has shown time and time again that it has the market’s back, so is that reason enough for risk trades to go chasing higher still?

That is the fundamental conundrum faced by the market now and that is reflective of the price action in the dollar as well over the last few days. As the market looks to try and settle that, cable is still continuing to ‘play in the range’ as outlined above.