Cable remains capped by 100DMA but still biased higher
Cable holds bullish bias despite multiple failures to clear strong barriers at 1.2500 zone (100DMA / Fibo 38.2% of 1.3381/1.1958 fall) which capped the action in past four days.
Daily momentum remains strong and rising MA’s (10/20/30/55) continue to underpin, but flat stochastic and RSI partially offset positive signals.
Fresh optimism about Brexit deal adds to positive sentiment, however, the situation is still vulnerable, as the EU gave 12 days to UK PM Johnson to set out his new plan.
UK retail sales came in line with expectations (m/m -0.2% vs -0.2% f/c) offsetting annualized figure (2.7% vs 2.9% f/c) and keeping the pound at the front foot.
Bank of England is expected to keep interest rates unchanged at 0.75%, but markets will focus on signals about cb’s next steps.
Top of thick daily cloud provides strong support (1.2399) and the price is expected to remain biased higher while holding above here.
Eventual break of 1.2500 pivots would spark fresh acceleration higher and expose target at 1.2669 (50% retracement of 1.3381/1.1958).
Only break below daily cloud top would weaken near-term structure and signal correction.
Res: 1.2501; 1.2526; 1.2558; 1.2579
Sup: 1.2459; 1.2438; 1.2400; 1.2379