Cable pulls back after bulls failed at 200DMA


Cable holds in red and some hundred pips below Thursday’s two-week high (1.2642), hit after 1% daily rally, sparked by month-end dollar’s sales.
The rally was capped by key barriers at 1.2647 (14 Apr former high / 200DMA) and sterling dipped after facing reality.
Global optimism was revived by a number of countries starting to ease the lockdown measures, but Britain is staying closed for some more time, as the country has the second highest coronavirus death toll in Europe.
The lockdown uncertainty contributed to pound’s fresh weakness, along with profit-taking on seven-day rally from 1.2247 which was unable to break key barrier in first attempt.
Scenario of deeper pullback is supported by daily indicators as momentum is weakening and approaching the centerline and stochastic turned sideways just under overbought zone borderline.
Extended dips need to find ground above 1.2490 (Fibo 38.2% of 1.2247/1.2642 / 55DMA) to keep bullish bias for renewed attempt towards 200DMA.
Break and close below 1.2490 would weaken near-term structure and signal stronger correction.

Res: 1.2599; 1.2647; 1.2700; 1.2744
Sup: 1.2533; 1.2490; 1.2445; 1.2422