Sterling continues to trend lower on rising dollar; pandemic low coming in focus
Cable remains in strong defensive mode and accelerates below 1.17 handle in early Monday, hitting new lowest since March 2020.
Fresh dollar’s strength following Fed Powell’s signals of extended period of higher interest rates and slower economic growth, in fight to restore price stability, further deflated sterling, which closed in red for the second consecutive week and posted new 2022 low on Monday.
The pair is on track for a massive monthly loss (over 4% so far) that weighs on sentiment and adds to scenario of retesting pandemic spike low at 1.1410.
Bearish technical studies support the notion, though oversold conditions on weekly chart warn that bears may face headwinds en-route.
Falling daily Tenkan-sen (currently at 1.1895) should keep the upside protected to provide better selling opportunities, but caution on extended bounce and violation of daily Kijun-sen (1.1971) and daily cloud base (1.1985) that would put larger bears on hold.
Res: 1.1717; 1.1760; 1.1852; 1.1900
Sup: 1.1648; 1.1634; 1.1556; 1.1493