Bears crack key supports and look to continue larger downtrend
Cable extends weakness into fourth straight day and tested key support at 1.3670 (Mar 25 low / 100DMA) in early European trading on Friday.
Bears emerged from daily cloud (cloud base lays at 1.3712) after trading within thick cloud for two weeks, generating bearish signal for extension of six-week downtrend from 1.4238 (2021 high) which requires confirmation on weekly close below 1.3670 pivot.
Cable is weighed by the issues with AstraZeneca vaccine as the EU imposed certain age restrictions for the vaccine but left to the member countries to decide, with rising violence in the Northern Ireland additionally pressuring pound.
Firm break of 1.3670 would expose next pivotal support at 1.3641 (Fibo 38.2% of 1.2675/1.4238 upleg), violation of which would confirm signal for bearish continuation.
Negative daily studies support the action but oversold stochastic and subsequent bounce after testing 1.3670 support suggest bears may take a breather before resuming.
Broken 10DMA (1.3784) should cap upticks and maintain bearish bias, while extension and close above 20DMA (1.3810) would sideline bears.
Res: 1.3750; 1.3784; 1.3810; 1.3839
Sup: 1.3700; 1.3670; 1.3641; 1.3609