Near-term risk shifts lower after another recovery failure
Cable stands at the back foot on Friday after Thursday’s action ended in bearish candle with long upper shadow and signaling another recovery rejection.
Pound is losing traction as positive sentiment on optimistic polls (You Gov showed expectations for the biggest Tory majority since 1987) is fading.
Repeated failure to clear psychological 1.30 barrier warn of stall, with the pair being on track for another close (seventh consecutive) below weekly cloud and Doji candle on monthly chart after strong rally in Oct, adding to negative signals.
Daily studies show weakening bullish momentum and mixed signals other indicators, while formation of pennant pattern on weekly chart still keeps alive hopes for continuation of larger uptrend from 1.1958 (2019 low).
Converged 20/30 DMA’s provide immediate support at 1.2878, followed by more significant higher base at 1.2820 (also Fibo 23.6% of 1.2197/1.3012) and recent range floor at 1.2768 (8 Nov) loss of which would expose pivotal supports at 1.2700 zone (converging 200/55DMA’s / Fibo 38.2%).
Conversely, move above bear-trendline off 1.3012 (currently at 1.2969) would generate initial bullish signal, but extension and close above 1.3012 (21 Oct high) is needed to confirm and signal bullish continuation.
Res: 1.2922; 1.2950; 1.2969; 1.2984
Sup: 1.2878; 1.2865; 1.2820; 1.2768