Cable edges lower on weaker Euro but still far from key supports
Cable eased on Wednesday, dragged by weaker Euro and weakened sentiment on rising number of COVID 19 fatalities.
Situation over PM Johnson, who spent the second night in the intensive care but being stable according to media reports, adds to negative near-term tone.
Bullishly aligned daily studies keep pound afloat for now as Tuesday’s bullish candle on 0.8% daily advance still underpins, along with converged daily Tenkan-sen / Kijun-sen attempting to form bull-cross.
On the other side, fresh risk aversion is expected to pressure, but there is still enough space for dips until 1.2231 (Fibo 23.6% of 1.1409/1.2485) which contained dips in past three days and marks key support.
Basically, there will be no clear direction signal as long as the pair holds between extended 1.2231/1.2485 range.
Break of 1.2231 would generate initial negative signal which will require verification on extension below falling 20DMA (1.2120) with reversal signal expected on break below 1.2074 (Fibo 38.2% of 1.1409/1.2485).
Res: 1.2352; 1.2378; 1.2407; 1.2485
Sup: 1.2287; 1.2231; 1.2164; 1.2120