Cable extends advance but thick monthly cloud is seen as strong obstacle for bulls
Cable hit new 2020 high at 1.3266 on Wednesday after data showed unexpected jump of UK inflation in July (1% vs 0.6% f/c).
Bulls extend Tuesday’s 1.03% rally, which gained pace after stop-loss order at 1.32 zone were triggered.
Daily studies show initial warning on fading bullish momentum and overbought conditions, but the picture on weekly and monthly charts is more bright and points to further advance.
Massive July’s bullish monthly candle (the pair was up 5.5%) underpins the action, with probe above 1.3243 (Fibo 61.8% of 1.4376/1.1409) adding to positive signals (weekly close above this level is needed to confirm the signal).
On the other side, thick falling monthly cloud (cloud base lays at 1.3570) weighs and may obstruct bulls.
Dips above 1.30 will offer better opportunities to re-enter bullish market.
Res: 1.3266; 1.3284; 1.3300; 1.3339
Sup: 1.3243; 1.3228; 1.3185; 1.3108