Cable holds near week’s lows as Brexit concerns continue to weigh
Cable stands at the back foot on Friday, holding in red for the third consecutive day, weighed by rising expectations that Boris Johnson will be UK’s next Prime Minister.
Johnson supports the idea that Britain needs to leave the EU on 31 Oct, with or without deal that maintains strong fear about disorderly Brexit and pressures pound.
Fresh weakness pressures pivotal supports at 1.2660 zone (lows of recent congestion / 50% retracement of 1.2559/1.2762 recovery leg / base of thick 4-hr cloud) with sustained break here to turn near-term bias lower and risk further weakness.
Thursday’s close below 20SMA (which reverted to resistance and caps today’s action) was bearish signal, however, flat momentum at the centerline, lacks firmer signal and slows bears.
Extension of sideways mode remains as possible scenario, however, bearish bias is expected to persist as long as price action holds below falling 30SMA (1.2765).
The pair is also on track for bearish weekly close that adds to negative outlook.
US retail sales data and speech of BoE governor Carney are in focus today and would provide fresh direction signals.
Res: 1.2678; 1.2686; 1.2702; 1.2713
Sup: 1.2653; 1.2642; 1.2610; 1.2580