Cable could drop to 1.20 on break of key supports at 1.2174/64
Cable is holding in red on Friday and continues to pressure key supports at 1.2174/64 (Fibo 38.2% of 1.1409/1.2647 / five-week range low) which were dented on previous day.
Sterling is under strong pressure by extended lockdown that caused record economy contraction, while comments that the central bank is not considering negative rates, but declined to rule it out, provided little help.
Markets speculate that pound could drop to 1.20 zone vs dollar in coming days, which requires firm break below 1.2174 pivot, that would also confirm double-top at 1.2647/42.
Rising negative momentum and daily MA’s in full bearish configuration, add to negative outlook, as the pair is on track for the biggest weekly fall in two months.
Former low at 1.2247 (reinforced by falling 5DMA) provides initial resistance, with extended upticks to be capped by descending 10DMA (1.2323).
Res: 1.2247; 1.2265; 1.2309; 1.2323
Sup: 1.2174; 1.2164; 1.2131; 1.2100