Cable stays in a tug of war just under the 1.2500 level

GBP/USD is doing battle around the 100-hour moving average for now

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The high the recent run higher touched 1.2507 but buyers are seen struggling a little to keep a firm break above 1.2500 with the 100-day moving average residing at the level.

The Navarro fiasco earlier led to a drop in cable down to 1.2437 but that was quickly reversed as he walked back on comments that the China trade deal “is over”.

From the price action on the hourly chart, the 100-hour MA (red line) was defended in that sense but the battle is still ongoing now at the level @ 1.2454 currently.

Keep above that and the near-term bias stays more neutral but break below and the near-term bias will then turn more bearish and favour sellers instead.

In trading today, the battle around the key hourly moving averages and the 100-day moving average at 1.2500 will be the key spots to watch for cable in this tug of war.

For sellers, keeping below 1.2500 and the 200-hour MA (blue line) @ 1.2521 will be the key challenge. As for buyers, they will be looking to try and test those levels after the run higher yesterday amid the better risk mood in the market.

As things stand, the risk mood remains more tepid after the Navarro fiasco earlier but as seen yesterday, it doesn’t take much to get markets excited. That said, just be mindful of coronavirus fears if anything else.

They tend to have a tendency of not mattering until it actually matters, so that is a key consideration for investors in case US coronavirus headlines jump out of the page again.