Bulls are taking a breather under key barriers after 1% advance
Cable is consolidating under new recovery high at 1.2558, posted after Thursday’s nearly 1% advance (the biggest one-day rally since 3 May).
Upbeat UK retail sales inflated pound with further acceleration higher being sparked by dovish Fed view that sent dollar lower.
Fresh bulls face headwinds from strong barriers at 1.2569 (falling 20DMA) and 1.2579 (12 July high), with risk of pullback seen on south-turning indicators on 4-hr chart.
Momentum on daily chart is rising, but still holding in the negative territory that keeps in play risk of recovery stall.
Unless we see clear break above 1.2569/79 pivots that would sideline bulls for stronger correction of 1.2783/1.2382 down leg, the downside will remain vulnerable.
Close below 10DMA (1.2500) to generate fresh bearish signal and shift near-term focus lower.
Overall negative picture with bearish sentiment on rising fears of no-deal Brexit, support scenario.
Caution on potential second Hammer on weekly chart that would signal bears might stay on hold for stronger recovery.
Res: 1.2558; 1.2569; 1.2579; 1.2597
Sup: 1.2514; 1.2500; 1.2439; 1.2425