Evening doji star pattern is forming on daily chart but still early to talk about reversal
Cable fell to fresh intra-week low (1.3840) in early US trading on Wednesday, as upbeat US retail sales revived positive sentiment about the US economic recovery and lifted dollar.
Fresh weakness after Tuesday’s Doji, which signaled indecision, is creating an evening doji star reversal pattern on daily chart and warning of deeper pullback.
Dips broke initial Fibo support at 1.3860 (23.6% of 1.3565/1.3951 upleg) and eye next pivots at 1.3811/04 (rising 10DMA Fibo 38.2%) close below which would boost reversal signals.
Daily techs are losing bullish momentum, while stochastic emerged from overbought territory after diverging from the price action.
The larger uptrend remains in place and is still too early to talk about reversal, although the pound was hit by the US data and some corrective action could be expected.
Res: 1.3860; 1.3907; 1.3919; 1.3951
Sup: 1.3811; 1.3804; 1.3775; 1.3758