Cable rises to new 14-month high on hawkish rate outlook / weak dollar
Cable is riding on extended third wave of five-wave cycle from 1.2307 (May 25 higher low) which hit Fibonacci extension 200% on Friday.
Steep upleg from 1.2486 (June 12 trough) extends into fourth consecutive day, hitting new 14-month high (1.2848), as sterling was lifted by weak dollar and hawkish signals from the Bank of England.
BOE MPC meets next week (June 22) and expected to deliver another rate hike (13th consecutive), on track to further diverge from the Fed, which paused rate hikes cycle for the first time in over one year and showed less hawkish expectations in the coming months.
Overbought daily studies warn that recent sharp bullish acceleration may lose steam and enter consolidation before pushing through immediate barrier at 1.2875 (200WMA) towards targets at 1.2946/1.3000 (Fibo 76.4% of 1.3748/1.0348 / psychological).
Dips should find solid support at 1.2679 (previous top of May 10, also the length of corrective wave 2).
Res: 1.2848; 1.2875; 1.2946; 1.3000
Sup: 1.2768; 1.2679; 1.2583; 1.2540