Correction faced strong headwinds at key resistances
Cable is standing at the back foot in early Thursday, signaling that two-day recovery on oversold conditions, which was sparked by strong downside rejection on Monday, might be running out of steam.
Price adjustment on profit taking after sterling entered uncharted territory, was a logical scenario, although there is a big question mark about the strength and length of correction, as overall picture is very bearish.
Cable is on track for the seventh straight monthly fall, with Septembers drop being the biggest since June 2016 that warn of limited upticks before larger bears resume.
On the other side, ear-term picture is unclear, as negative momentum is strong and moving averages are in bearish setup on daily chart, but the RSI is still oversold and weekly action is so far shaped in Doji candle with very long tail.
Correction was so far capped by pivotal resistances at 1.0900 zone (Fibo 38.2% of 1.1738/1.0348 bear-leg / daily Tenkan-sen) and near-term bias is expected to remain with bears while the price stays below these barriers, but bears will require a confirmation on weekly / monthly close below 1985 low at 1.0520.
Conversely, sustained break of 1.0900 resistance zone would signal extended recovery, but only lift above daily Kijun-sen (1.1124) would neutralize bears for stronger correction.
Res: 1.0879; 1.0904; 1.1000; 1.1043
Sup: 1.0762; 1.0676; 1.0539; 1.0520