GBP/USD – spike in Asia goes unexplained

Cable spiked to 1.4660 levels in Asia but the move lacked any clear fundamental trigger. Early explanations were that latest Brexit polls showed a minor lead for ‘remain’ vote. However, that alone is unlikely to have resulted in a blast higher. Consequently, we are forced to assume that the spike may have been due to a ‘fat finger’ in the market.

The bird now hovers around 1.45 handle. The data docket in UK is thin and Cable thus remains at the mercy of Brexit talk. Note that – Brexit referendum is not binding on the parliament!

Outlook

• Retreat from Asian session high of 1.4660 to 1.45 levels marks failure to sustain above rising trend line (black). This if followed by a break below Asian session low of 1.4433 could signal a drop to daily 100-MA level of 1.4345.
  

• On the higher side, move above 1.45145 (Mar 18 high) may attract bids, although caution is advised given the thin liquidity.