Risk of consolidation / correction before final push through June high rises
Cable is holding within narrow range below new 6-week high at 1.2767 in early Thursday’s trading, after repeated close above 200DMA (Tue/Wed) generated bullish signal.
On the other side, Wednesday’s long-tailed Doji signaled that the downside is so far protected, but also pointed to indecision on approach key barrier at 1.2813 (10 June high).
This implies that bulls may fail on the first test and prompt traders to collect profits that would push the price lower.
Overbought daily stochastic turned south and bullish momentum started to weaken, supporting scenario, which would require confirmation on close below 200DMA.
Conversely, the third straight close above 200DMA would confirm firm bullish stance, but extended consolidation ahead of final push through 1.2813, cannot be ruled out.
Immediate support lays at 1.2697 (200DMA) followed by 1.2645 (Fibo 23.6% of 1.2251/1.2767) and pivotal rising 10DMA / trendline support (1.2627/08).
New high at 1.2767 marks initial resistance, ahead of 1.2813, violation of which would signal bullish continuation and unmask psychological 1.30 barrier.
Res: 1.2753; 1.2767; 1.2813; 1.2850
Sup: 1.2697; 1.2669; 1.2645; 1.2608