Cable extends weakness after bull-trap, risk aversion adds to bearish pressure
Cable extends weakness into third straight day and cracks key supports at 1.3015/00 (55DMA / psychological) in early Monday.
Bears threaten of extension towards 1.2860 zone higher base (reinforced by 100DMA and Fibo 61.8% of 1.2675/1.3177) on break here and nearby daily cloud base (1.2981).
Weakening daily studies support the notion (although bullish momentum still exists) as last week’s bull-trap above key Fibo barrier at 1.3173 weighs and Wednesday’s cloud twist is magnetic.
Larger picture shows a month-long uptrend from 1.2675 (23 Sep low) still intact, with short-term action expected to remain biased higher while holding above 1.2946 pivot (bull-trendline connecting lows at 1.2675 and 1.2862).
On the other side, negative fundamentals maintain pressure and keep in play risk of deeper fall.
Sharp rise in Covid-19 infections across the Europe, with some countries reporting record case, neutralized risk sentiment on Monday.
US stimulus talks remain on the brink of collapse, Brexit negotiations are expected to resume but high uncertainty continues to surround talks, adding to risk aversion.
Res: 1.3058; 1.3082; 1.3122; 1.3152
Sup: 1.2981; 1.2968; 1.2946; 1.2923