Brexit pessimism keeps bears in control, extended corrective upticks to be capped under 1.2270/90 pivots
Cable bounces new one-month low at 1.2195 (also Fibo 61.8% of 1.1958/1.2582) in early Wednesday’s trading, as traders take profits after strong fall on Tuesday and bears consolidate above key support.
Bears remain in control on rising pessimism over Brexit as no-deal divorce currently looks as the most likely scenario.
It seems very unlikely that a deal can be secured as the time is running, however the stakes are very high and both sides may put more efforts to avert no-deal Brexit on next week’s EU summit Daily tech remain in strong bearish setup, as today’s formation of daily Tenkan-sen / Kijun-sen bear-cross adds to negative outlook.
Current bounce is so far seen as positioning for fresh attack at key 1.2200 support zone, as fresh bulls cracked initial barrier at 1.2235 (Fibo 38.2% of Monday’s 1.2302/1.2195 fall and eye falling 55DMA (1.2256) and former strong support at 1.2270, which should ideally cap recovery attempts.
Falling 10DMA (1.2290) marks pivotal barrier, break of which would sideline immediate downside risk.
On the other side, firm break of 1.2200 zone would open next pivot at 1.2134 (daily cloud base), loss of which would risk extension towards key 1.20 support zone.
Brexit news are expected to remain pound’s key driver these days.
Res: 1.2237; 1.2256; 1.2270; 1.2290
Sup: 1.2220; 1.2204; 1.2197; 1.2134