Cable looks for more direction signals as recovery faces headwinds
Cable maintains positive tone on Wednesday and holding at 1.3050 zone, after better than expected UK labor data on Tuesday eased expectations for BoE rate cut and improved the sentiment.
Fresh bulls from Monday’s hammer candle low at 1.2962 eye pivotal barrier at 1.3080 (Fibo 38.2% of 1.3284/1.2954 bear-leg) where Tuesday’s rally stalled.
Firm break here is needed to spark further recovery and expose Friday’s spike high (1.3118), but reversal signal could be expected only on break above daily cloud (top of the cloud lays at 1.3199).
Momentum in daily chart is heading north but still in the negative territory, RSI is flat and MA’s in mixed setup, signaling that near-term action may enter sideways mode.
Initial support lays at 1.3035 (10DMA) which holds Wednesday’s action for now, while extension below 55DMA (1.3015) would sour the sentiment and risk retest of lows at 1.2954 (14 Jan) and 1.2962 (20 Jan).
Res: 1.3067; 1.3080; 1.3118; 1.3158
Sup: 1.3035; 1.3015; 1.2995; 1.2962