Cable – bears face headwinds from daily cloud top

Cable remains in a step fall from last Wednesday’s 2 ½ month peak (1.3725) which has so far retraced over 61.8% of recent 1.3333/1.3725 rally and cracked next significant support at 1.3465 (daily cloud top).

Pound was initially hit by stronger dollar after Fed disappointed expectations for keeping very dovish stance, with signals from BoE Governor for possible further rate reductions, boosting bears on Thursday, while Friday’s unexpectedly high rise in UK borrowing sparked fresh acceleration lower.

Technical studies weakened on daily chart, with the pair being on track for weekly close in red (potential formation of bearish engulfing and long upper shadow on weekly candle add to negative signals).

On the other hand, daily cloud top offers solid support, which may hold bears for some time, with limited upticks to be capped under 1.3530 (daily Kijun-sen / broken Fibo 50%) to offer better selling levels and keep bears in play.

Res: 1.3500; 1.3530; 1.3559; 1.3575
Sup: 1.3465; 1.3426; 1.3397; 1.3333