The sell-off on cable (GBPUSD) is now at the tip. It should be recalled that this pair has been selling off since the month of December 2015 till now. It broke all the major support especially the lows of 2015 at 1.4562 which was in March of 2015. The pair currently trades at the dips of 1.42. this is a very important support level to watch. A break of this support level might see prices fall as low as 1.36 which is known as the Thatcher low.
This morning (9:30am UK) the UK inflation data will be released. Market is expecting an inflation figure of 0.1%. This is a very important data to watch because it might either make or break cable at this level. A weaker than expected figure, will crash this currency to the dips below the 1.42 level, but a stronger than expected will see a bit of rally.
However, this currency pair remains bearish and we might eventually see prices drop below 1.42. This is because of some factors like disappointing economic data (Industrial production) UK referendum and possibility of no Rate hike the Bank of England anytime soon.
Fig 1: The chart below is the monthly chart of Cable showing all major support levels to watch.