Bears extend on fresh fears of hard Brexit
Cable remains in red in early Monday’s trading (opened with 18-pips gap lower in Asia) and extends weakness through thick daily cloud, following 0.5% fall last Friday.
Stronger dollar on upbeat US data last Friday keeps sterling at the back foot, with the latest comments from top UK official that the UK will not align to EU rules in coming Brexit talks, raising concerns about hard Brexit and increasing pressure on pound.
Friday’s long bearish daily candle weighs as the action registered close within daily cloud that generated negative signal.
Rising bearish momentum on daily chart and south-heading RSI / stochastic, confirm bearish bias for test of next key supports at 1.2919/04 (Fibo 38.2% of 1.1958/1.3514 / 22 Dec trough).
Repeated weekly close below pivotal 200WMA (1.3060) and weekly 14-period momentum attempting to break into negative territory, add to negative signals.
Broken daily cloud top and 200WMA (1.3030/1.3060 respectively) now act as solid barriers which are expected to maintain bearish stance.
Res: 1.3000; 1.3030; 1.3060; 1.3093
Sup: 1.2970; 1.2954; 1.2919; 1.2904