Sterling rallies on sharp fall of oil and pressures again key 1.2501 barrier
Cable advances in early US trading on Tuesday, as crude oil price fell sharply on comments from Saudi Arabia that oil production will be fully restored after attack within weeks, much shorter than initial estimations showed.
The pair pulled back after bulls repeatedly failed to clear important barrier at 1.2501 (Fibo of 1.3381/1.1958 / falling 100DMA), but dips found solid support at daily cloud top, which contained attacks on Mon/today.
Fresh rally pressures 1.2501 pivot, with firm break here to generate bullish signal for continuation of recovery leg from 1.1958 (3 Sep low).
Rising bullish momentum and daily MA’s (10;20;30;55) in bullish setup support scenario, as thick daily cloud continues to underpin.
However, risk of another rejection at 1.25 zone cannot be ruled out, with extended consolidation seen as likely scenario.
Firm bullish bias expected while the price holds above daily cloud.
Res: 1.2501; 1.2558; 1.2579; 1.2600
Sup: 1.2445; 1.2412; 1.2392; 1.2362