UK data eyed for fresh signals
Cable maintains positive tone and pressuring new over seven-month high at 1.3180 (9 Dec) in Tuesday’s early European trading, ahead of UK data.
Strong bullish sentiment remains fueled by expectations for Conservative Party victory on Thursday’s election that would open way for ending Brexit story by 31 Jan deadline.
Daily studies are firmly bullish but overbought stochastic and RSI warn that bulls may face strong headwinds at this zone after cracking barriers at 1.3167/79 (50% retracement of 1.4376/1.1958 descend 3 May high) and approaching bear-trendline off 2014 high at 1.7189 (1.3190).
UK GDP (Oct m/n 0.1% f/c vs -0.1% prev); Manufacturing production (Oct 0.1% f/c vs -0.4% prev) are key events for sterling today, after bulls were mildly impacted by last Friday’s upbeat US jobs data.
Strong releases today would give fresh boost for break above trendline resistance and extension of larger uptrend from 1.1958 low.
On the other side, sterling might deflate on worse than expected figures and risk test of initial support at 1.3100 (Friday’s post-data low) with stronger pullback to eye 1.3039 (rising 10DMA) and key 1.30 support zone.
Res: 1.3180; 1.3190; 1.3247; 1.3269
Sup: 1.3150; 1.3132; 1.3100; 1.3039