Sterling eyes signals from PMI data and 2021 budget
Cable edges higher in early Wednesday’s trading but remains within range, capped by 1.40 level, now reverted to solid resistance.
Pullback from new nearly three year high showed signs of stall after being repeatedly contained by rising 20DMA, but subsequent recovery attempts were limited, with double-Doji (Mon/Tue) signaling indecision.
Daily studies remain supportive as 14-d momentum started to rise and stochastic emerges from overbought zone, but fundamentals are likely to be pound’s key driver today.
UK Services and Composite PMI data are key events today, with optimistic forecasts signaling that UK economy might be on recovery path.
Traders also focus the release of UK’s 2021 budget, due later today, as Finance Minister Sunak is expected to do whatever it takes to steer the economy through what he hopes will be the final months of coronavirus restrictions.
Expect direction signals on clear break of pivots at 1.4000 (psychological / 10DMA / Fibo 38.2% of 1.4238/1.3858 pullback) or 1.3910 (20DMA).
Res: 1.4000; 1.4030; 1.4079; 1.4100
Sup: 1.3936; 1.3902; 1.3858; 1.3822