FX round-up: Traders on watch for break-out in cable

Fresh poll results pointing to a better chance of the 'Remain' camp coming out on top at the upcoming referendum on EU membership and a respite in the US dollar´s recent run higher combined to push cable towards a significant level of so-called technical resistance.

According to an opinion poll conducted for the Evening Standard by Opinium, voters in London said they were overwhelmingly in favour of the UK staying inside the European Union, by a margin of 60% in favour to 40% against.

As of 19:29 BST, the pound was 0.51% higher against the greenback and changing hands at 1.4710. The single currency also lost groung against sterling, depreciating 0.33% to end the day at 0.7588.

Hence, cable, as the US dollar-British pound currency pair is nick-named by traders, was thus pushed closer to the intra-day highs it saw at the start of the month, a barrier which was reinforced by its 200-day moving average then at 1.4775.

If that area of resistance were breached on weekly charts by a sufficient margin, it might presage in sterling back towards 1,5700-1,5800, technical analysts at Digital Look said, who also pointed out how cable might be carving out a so-called inverted 'head-and-shoulders' pattern.

Strength in the pound came despite a warning from S&P that Brexit might entail a "possibly considerable" drop in the value of Britain´s currency.

To take note of, overnight the People´s Bank of China set the value of its daily fixing for the country´s currency, the yuan, 0.3% weaker at 6.5693 per US dollar, its weakest level since March 2011.

Also overnight, in an interview granted to CNBC the president of the US Federal Reserve bank of Atlanta, James Bullard, appeared to hold out the possibility that the next step in policy tightening might be postponed until July´s meeting.

"I don't think there's any reason to prejudge the June meeting. We can wait until we get to the meeting, see what the latest data says, and try to make a good decision there."

The US dollar spot index took a breather following several days of gains, drifting lower by 0.17% to 95.41.