Bears are consolidating above 100DMA before resuming
Cable bounces from new lowest level since 27 Nov (1.2871) in early European trading after rising 100DMA (1.2888) contained Friday’s fall and today’s brief probe below was short-lived.
Outlook remains negative as strong dollar and friction between the EU and UK continues to weigh on sterling, which was down 2.2% vs dollar last week (the biggest weekly fall since the mid-Dec).
Weekly close below pivotal Fibo support at 1.2919 (38.2% of 1.1258/1.3514) was bearish signal, with rising negative momentum and daily MA’s (10/20/30/55) in bearish setup, adding to negative tone.
On the other side, deeply oversold stochastic suggests that bears may stay on hold for consolidation before resuming.
Former higher base at 1.2950 now offers solid resistance which should ideally cap consolidation and guard pivotal 1.3000 barrier.
Res: 1.2950; 1.2975; 1.3000; 1.3034
Sup: 1.2871; 1.2822; 1.2768; 1.2736