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It's been a bit of a roller coaster for Sterling over the past few weeks.

The turmoil of charting a new all-time low at 1.0356, has been accompanied by a valiant rally higher.

So, what now for the pound? Has it done enough to reverse the damage inflicted by those tax cuts or is there more pain for the pound?

In order to answer that question, we take a look at the daily chart – so far the market has seen a correction and a correction only.

So where is the key resistance for this market and how far does it have to climb before it can reverse the damage wrought by Truss and her team?

We can see a clear convergence of resistance in the 1.1650-1.1760 band, which represents the low that we got in July, the 55-day ma, the 38.2% retracement of the entire move down that we have seen this year.

All of this offers a solid band of resistance, and the market is likely to struggle to climb over this hurdle, but we suspect before it can make any real impact on those resistance levels it’s going to

need to overcome the cloud resistance.

Why is this so important?

Because not only can we see that it has acted as strong resistance since March 2022, but the market again failed at the top of this cloud in August (at 1.2277) and we suspect that this is acting as the barometer of the trend.

So, in order to reverse some of the damage seen recently the market is going to have to close above this resistance as well and this is currently found at 1.1850.

We suspect that the market will see initial failure at 1.1650-1.1850 band and we are alert to the idea of failure here.

If you would like to learn more about technical analysis, the next course run by the Society of Technical Analysts starts October 12th and details about this course and the STA can be found here.

It is a pretty dense band of resistance and we suspect that the correction higher will struggle here and we are alert to the idea of initial failure.

Watch: Key resistance levels for GBP/USD

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