Penetration of daily cloud brings bears in play
Cable fell to new two-week low at 1.2372 in early US trading on Wednesday, after repeated rejection at pivotal Fibo barrier at 1.2501 further soured sentiment and dollar regained traction after being hit by fresh political crisis in the US over attempts to initiate US President Trump’s impeachment.
Fresh weakness cracked key support at 1.2399 (daily cloud top), signaling an end of multi-day congestion and generating initial reversal signal.
Daily close below cloud top is needed to confirm scenario and shift near-term focus towards supports at 1.2343 (Fibo 38.2% of 1.1958/1.2582 / 20DMA) and 1.2293 (converged 55/30DMA’s) in extension.
Lack of fresh news today leaves the price action in control of techs, as daily momentum continues to head south and approaching the border line of negative territory that may further accelerate bears.
Persisting Brexit uncertainty remains key negative factor for sterling, with market’s focus turning towards UK election which is one of likely scenarios in Brexit saga.
Res: 1.2399; 1.2413; 1.2451; 1.2468
Sup: 1.2372; 1.2343; 1.2293; 1.2270