BoE’s hawkish hike lifts cable through pivotal 1.3600 resistance
Cable extends advance into fifth straight day, with fresh acceleration through important 1.3600 barrier (Fibo 61.8% of 1.3748/1.3357 bear-leg) which hit two-week high, being sparked by BoE’s hawkish shift.
The Bank of England hiked interest rates by 25 basis points to 0.5%, as expected, but split MPC with nearly half of committee’s members suggesting 50 basis points increase and February’s increase being the second in a row, suggest that another hike can be expected, with more action not ruled out.
The policymakers continue to tighten on surging inflation, which the expect to rise towards 7% in coming months, although remain cautious on possible ease in strong price pressure.
Improved daily studies add to positive post-BoE sentiment, however, fresh bulls need to register a daily close above 1.3600 mark to confirm positive stance and sideline risk of stall, as 14-d momentum is still in the negative territory although heading north and stochastic is overbought.
Clear break of 1.3600 pivot would open way for test of 1.3656 (Fibo 76.4%) and expose 200DMA (1.3711).
Broken 20DMA marks initial support at 1.3562, which should hold and guard lower pivot at 1.3537 (30DMA / daily low).
Res: 1.3627; 1.3656; 1.3711; 1.3748
Sup: 1.3562; 1.3537; 1.3511; 1.3492