Pivotal Fibo support holds but bears continue to focus key 1.20 support zone
Cable stays in a quiet, narrow range mode in early Monday’s trading, holding for the second day above significant Fibo support at 1.2127 (61.8% of 1.2015/1.2309) as market participants await fresh news.
Political uncertainty and rising pessimism regarding attempts to avoid no-deal Brexit, continue to weigh and keep near-term bias with bears.
Long bearish monthly candle in August, after Jun/July recovery stalled at 1.2300 and subsequent weakness that so far reversed 50% of 1.2015/1.2309 recovery leg, adds to negative outlook.
Flat daily momentum and RSI warn of extended consolidation, with oversold stochastic warning of potential upticks, which are expected to offer fresh selling opportunities while holding below 1.2250 (bear-trendline drawn off 1.3179 30 May high).
Converged 30/10/5 DMA’s mark initial resistances at 1.2200 zone.
Markets focus of UK Manufacturing PMI (Aug 48.4 f/c vs 48.0 prev), due today, which could boost the price in better than expected release, however, limited positive impact could be expected as long ad the indicator stays below 50 threshold, as this signals contraction.
Bearish scenario remains favored, with firm break below 1.2127 pivot to generate fresh signals for renewed attempt towards key 1.20 support zone.
Only break and close above trendline and recovery top at 1.2309 would sideline immediate bears.
Res: 1.2174; 1.2191; 1.2202; 1.2250
Sup: 1.2139; 1.2127; 1.2108; 1.2084