Cable – bulls probe through 1.42 barrier and show signs of further advance
Cable cracked next psychological barrier at 1.4200 in early hours of the US session trading on Wednesday, marking the advance of over 200 pips so far from Asian low at 1.3996 to fresh post-Brexit vote recovery high at 1.4208.
Pound continues to trend higher and accelerated rally after US Treasury Mnuchin axed the greenback on comment earlier today in Davos economic forum that weak dollar is good for America.
Cable is so far showing no signs of fatigue despite strong rally today (the pair was up 1.5% for the day so far), signaling extension towards next target at 1.4288 (Fibo 76.4% of post-Brexit vote 1.5016/1.1930 fall) and further stretch of extended wave C (the wave commenced from 1.3301, 15 Dec trough) towards its 200% Fibonacci expansion at 1.4317.
However, some corrective action could be anticipated in the coming sessions as daily studies are overextended, but daily indicators continue to move north in deep overbought territory and showing no signs of generating any bearish signal for now.
Res: 1.4208; 1.4250; 1.4288; 1.4317
Sup: 1.4134; 1.4100; 1.4058; 1.4000