A combination of sterling weakness and dollar strength over the last few days has driven cable back towards 1.41 at a time when it was showing signs of finally gathering some upward momentum.
The pair now faces a test of its renewed weakness, with 1.4050-1.41 representing a region that it has so far this year found to offer decent support. In the brief period that it did trade below here, this area also became resistance for the pair.
A move below this zone would matter for two reasons. Firstly it would break the combination of higher highs and higher lows (albeit only one of each) that initially pointed to a possible period of bullishness in the pair.
Second, a move below the most recent low could open up a move back towards 1.3835, the low from the end of February.
A failure to break below here may indicate that it has once again been established as an important support zone for the pair, with resistance possibly being around last week’s highs, around 1.45.