Cable hits new 2023 high on results of UK local elections / weaker dollar

Cable hit new 2023 high in early Friday, lifted by results of UK local election, in which conservatives suffered heavy losses, as voters showed their disappointment over weak economic growth, high inflation and political scandals.

Election results improved pound’s sentiment and brighten outlook for Labour party in the next general election.

Weaker dollar also contributed to the latest acceleration, which looks for today’s close above 1.2600 zone to confirm break and signal further advance as the pair is on track for the seventh straight weekly gain.

Bullish daily studies (MA’s in bullish setup; positive momentum is strengthening, 20-d Bollinger bands expand) add to positive signals.

Markets await today’s key event – US labor report for April, which is expected to show further slowdown in US job growth and increase in unemployment, with April’s figure below forecast (180K f/c vs 236K in Mar) to add pressure on dollar, already dented by dovish Fed and offer fresh support to sterling.

Bulls eye targets at 1.2725/59 (100WMA / Fibo 61.8% retracement of larger 1.4249/1.0348 downtrend), with stronger bullish acceleration to attack 200WMA (1.2868) and unmask psychological 1.30 barrier.

Rising daily Tenkan-sen offers solid support at 1.2510, followed by rising daily Kijun-sen (1.2454) loss of which would sideline bulls and risk deeper pullback.

Res: 1.2634; 1.2666; 1.2725; 1.2759
Sup: 1.2583; 1.2545; 1.2510; 1.2454