Cable claws back some losses but buyers still have more work to do

GBP/USD nudges higher to 1.2230 from 1.2200 earlier

GBP/USD H1 21-05

The lows today leaned on support from the 50.0 retracement level of the slight bounce higher during the start of the week, before making its way back above the 100-hour MA (red line) @ 1.2198. That sees the near-term bias keep more neutral for now.

Coincidentally, the nudge higher here comes after the UK PMI release earlier, which honestly I wouldn't ascribe this move to, but it is what it is.

Nonetheless, the near-term picture in cable remains more or less unchanged.

Buyers are now moving back towards a test of the 200-hour MA (blue line) @ 1.2236. Keep below that and the bias stays more neutral. Break above and the bias then turns more bullish, and buyers can try to work back some upside momentum.

That said, the resistance region around 1.2275-00 remains a key spot that sellers are holding on to as seen earlier in the week. That will represent the key line in the sand for the pair should we see this upside move extend, for any reason.

The risk mood is still keeping softer on the session and that is helping the dollar to stay underpinned for the most part. As such, cable buyers will have their work cut out for them to try and break the 1.2275-00 region if the current mood continues.

On the pound side of the equation, negative rates chatter, Brexit risks, and the UK's struggles to deal with the coronavirus outbreak are still negative factors to consider.