Cable is consolidating under new multi-month high
Cable hit new 8 ½ month high (1.3368) in Asia on Monday, in extension of Friday’s 1.14 rally (the biggest one-day advance since 1 June).
Bulls are taking a breather in European session but maintain bullish bias following 2.07% weekly advance and close above significant Fibo barrier at 1.3243 (61.8% of 1.4376/1.1409).
Long bullish candle of last week, after three consecutive weekly Dojis, signals continuation of larger uptrend, which was paused for three week consolidation.
Monthly close above 1.3243 pivot would add to bullish stance and open way for extension towards 1.3514 (13 Dec high) and 1.3570 (base of thick monthly cloud) in extension.
Weak dollar continues to underpin pound, offsetting for now Brexit concerns and negative impact from Covid-19 pandemic, however, overbought daily / weekly studies and fading bullish momentum, warn that bulls may lose traction and hold in extended consolidation before resuming.
Broken Fibo barrier at 1.3243 now marks key support.
Res: 1.3368; 1.3398; 1.3422; 1.3480
Sup: 1.3301; 1.3266; 1.3243; 1.3191