Bulls regained control after being briefly hit BoE’s Brexit warning
Cable regained traction and retested 100DMA barrier, on bounce from session low at 1.2437, posted after BoE rate decision.
Sterling keeps bullish bias despite warning tone from the central bank on persisting uncertainty and further Brexit delay which would hurt UK economic growth.
The BoE MPC kept interest rate unchanged at 0.75% and kept QE at 435B, while minutes of September’s meeting showed that BoE MPC voted 9-0 to keep rates unchanged.
The central bank said that UK growth slowed due to global slowdown but remains slightly positive, labor market remains tight and UK current account deficit has likely narrowed in Q2, presenting positive factors which counterweight negative impact from Brexit fears.
Quick recovery after dip to 1.2437 (also Wednesday’s low) signal that bulls keep control but still lacking strength for final push through pivotal barriers at 1.2500 zone (falling 100DMA / of 1.3381/1.1958.
Near-term outlook remains positive while the price holds above key supports at 1.2400 (10DMA / daily cloud top), but extended congestion between 1.2400 and 1.2500 pivots, cannot be ruled out.
Res: 1.2501; 1.2526; 1.2558; 1.2579
Sup: 1.2476; 1.2437; 1.2400; 1.2379