In today’s technical analysis, let’s take a closer look at Cable — the British Pound against the American Dollar — which continues to show signs of technical weakness, especially following yesterday’s decline.
On the H4 chart, a clear triple top formation has emerged, with a neckline marked in black. This neckline was already broken earlier this week, generating a solid sell signal. That bearish view was further confirmed when the pair broke below last week’s lows, reinforcing the momentum in favor of sellers.
While today’s session opened with a bit more optimism for the Pound, buoyed by stronger-than-expected UK inflation data released early in the European session, the technicals are still stacked against the bulls. The current upswing appears to be nothing more than a corrective move. Price remains below both the black neckline and the yellow horizontal resistance — the very levels that were previously broken. As long as Cable stays under these two barriers, the broader sentiment remains negative and we should anticipate another wave to the downside.
However, it’s important to keep in mind that today’s FOMC decision, statement, and press conference will likely set the tone for the next major move. Volatility is expected, and traders should be prepared for sharp reactions depending on how the Fed’s tone contrasts with market expectations.