Strong headwinds from Mon high / double-Fibo barrier keep the upside limited ahead of Carney’s speech
Cable stands at the front foot in early Europe on Tuesday but so far unable to clear Monday’s high at 1.2883.
Bulls face headwinds here and from double-Fibo barriers at 1.2895/97 (38.2% of 1.3174/1.2722 & 50% of 1.3071/1.2722).
Monday’s long-legged Doji signaled indecision, with a cluster of bearishly aligned daily MA’s and weakening momentum, adding to unclear direction signals.
Brexit remains the key event for Sterling, with UK PM May sticking to her divorce deal draft, with comments from the EU officials being supportive for the plan that is supportive factor for pound.
On the other side, opposition is trying to force vote for no-confidence vote in May, which could have negative impact.
Focus turns towards UK Inflation report and speeches from top BoE officials, lead by governor Carney, which could provide fresh signals for sterling.
Bearish scenario sees return below Monday’s spike low at 1.2793 as bearish signal for renewed attempts towards 1.2722 (15 Nov low), violation of which would expose key supports at 1.2695/61 (30 Oct / 15 Aug lows).
Conversely, sustained break above 1.2900 zone (double-Fibo / falling 20SMA) would signal further upside.
Res: 1.2883; 1.2897; 1.2909; 1.2948
Sup: 1.2833; 1.2793; 1.2760; 1.2722