Fresh weakness on PMI miss probes below trendline / MA supports
Cable extends weakness into fourth straight day, following rejection on approach to 1.30 resistance zone.
Weaker than expected UK PMI data (Manufacturing Nov 48.3 vs 49.0 f/c; Services Nov 48.6 vs 50.0 f/c) on Friday, pushed sterling to one-week low at 1.2863 on Friday.
PMI miss fuels scenario of rate cut on BoE’s MPC 19 Dec policy meeting that was already boosted by unexpected vote for rate cut of two MPC members on 7 Nov MPC meeting.
Weaker structure on daily chart on return below cracked bear-trendline (drawn from 1.3012 peak) and probe below converged 10/20/30DMA’s risks further weakness as the pair is on track for the sixth straight close below weekly cloud, which twisted last week and is descending.
Bears need close below MA’s that would open way for test of Fibo support at 1.2820 (23.6% of 1.2197/1.3012) and expose more significant support at 1.2768 (8 Nov low).
Flat daily momentum warns that fresh bears may run out of steam, but stronger direction signal can be expected only on close above the trendline (1.2909).
Res: 1.2909; 1.2928; 1.2969; 1.2984
Sup: 1.2863; 1.2820; 1.2768; 1.2700