Bulls are consolidating after overnight’s surge on election results
Cable eases below initial support at 1.3400 in early European trading, after skyrocketing to new 1 ½ year high at 1.3514 overnight, on announcement of Conservative Party election victory.
Corrective action was sparked by profit-taking after rally of more than three big figures in Asia on Friday, which extended four months uptrend on expectations of Tory’s victory and eventual end of Brexit story.
The sentiment (after election results confirmed traders’ expectations) remains bullish and current pullback so far seen as positioning for fresh upside action, with overbought 4-hr studies adding to correction signals.
Fresh weakness faces solid supports at 1.3336/23 (Fibo 38.2% of 1.3050/1.3514 upleg / rising hourly 20DMA), which is expected to ideally contain, while break here would signal deeper pullback and expose 1.3282 (50% retracement) and pivotal 1.3227 support (Fibo 61.8% of 1.3050/1.3514).
Res: 1.3400; 1.3449; 1.3482; 1.3514
Sup: 1.3336; 1.3323; 1.3282; 1.3227