The US dollar has slacked off in the past hour and that’s opened the door towards a fresh one-week high in cable. GBP/USD is just a couple pips shy of yesterday’s high of 1.2225 and there could be some stops if it’s broken.

Even if it does break, I wouldn’t expect fireworks with non-farm payrolls just over an hour away.

As it stands, cable is on track for a third straight day of gains and fourth in the past five. In the bigger picture though, it’s consolidating near six-month lows. The next leg is going to depend on what the US dollar does. Positioning is crowded in dollar longs so if US data begins to weaken or the Fed takes a more-explicit neutral stance, then there could be some shifts.

In addition, equities are now in the seasonally-strongest portion of the year. If stock markets continue to climb then expect this pair to climb at the same time as it’s one of the higher-beta pairs.

This article was written by Adam Button at www.forexlive.com.