Limited dips keep larger bulls intact
Cable regained traction in early Thursday’s trading, underpinned by better than expected UK housing data, reducing immediate risk of deeper pullback after Wednesday’s close in red.
The pair hit new multi-week high (1.2525) following break of key resistance at 1.2447 (Dec 14 / Jan 23) on Tuesday, but overbought conditions temporarily slowed bulls.
Broken 1.2447 barrier reverted to solid support which is so far holding and keeping larger bulls intact, despite initial signals of correction (overbought stochastic / fading bullish momentum on daily chart).
Sterling enjoys strong support from weakening dollar, hit by much weaker than expected data from the US labor and services sectors, which further soured sentiment and added to expectations that the Fed would slow the pace of policy tightening.
Markets eye US weekly jobless claims (today) and non-farm payrolls (Friday) for more direction signals, with lower volumes on Good Friday holiday, likely to increase market volatility.
Bulls look for weekly close above 1.2447 pivot to confirm signal of bullish continuation, which would expose targets at 1.2659/66 (May 2022 double-top) and 1.2759 (Fibo 61.8% of 1.4249/1.0348 fall) in extension.
Caution on firm break of 1.2447 support which would signal pullback and sideline immediate bulls.
Res: 1.2525; 1.2535; 1.2600; 1.2694
Sup: 1.2447; 1.2394; 1.2373; 1.2354