Cable eases from new 2019 high on Brexit talks / overbought conditions, but outlook remains bullish
Cable pulls back from new multi-month high at 1.3237, posted today on bullish acceleration, sparked by news about delayed Brexit.
Probe above former 2019 high at 1.3217 (25 Jan) was so far short-lived, as PM May promised lawmakers Britain will leave EU on 29 Mar only with their consent and if her plan doesn’t pass, the parliament will vote for delayed Brexit, but extension could not go past June.
Overbought conditions and bearish divergence on daily stochastic, added to expected hesitation at key barrier at 1.3217 and risk of pullback, as thick descending weekly cloud also weighs (cloud base lays at 1.3265).
The dollar rose on mixed US housing data and increased consumer confidence (Feb 131.4 vs 124.7 f/c and 121.7 in Jan), adding pressure to the pound.
Overall picture remains bullish and easing is so far seen as positioning for renewed attempt higher.
Dips were so far contained by rising hourly 20SMA (1.3149), keeping intact more significant supports at 1.3081 (rising daily 5SMA) and 1.3047 (broken Fibo 61.8% of 1.3217/1.2772).
Corrective dips should ideally find support at higher platform at 1.3112 (broken Fibo 76.4% / double upside rejection) to keep bulls intact, but extended downticks towards 1.3081/47, cannot be ruled out.
Key supports lay at 1.30 zone (converged 200/55/20/10 SMA’s) and only break here would neutralize bulls.
Res: 1.3217; 1.3237; 1.3265; 1.3297
Sup: 1.3149; 1.3112; 1.3081; 1.3047