Cable maintains soft tone despite swift recovery after overnight’s crash to 1.2400 zone hit new lowest level since early April 2017.
Rising fears over the health of the global economy which prompted traders from riskier assets, keep sterling under pressure.
Wednesday’s strong close in red after repeated failure to clearly break above pivotal 1.2743 Fibo barrier, which formed bearish outside day and weak UK Construction PMI data (Dec 52.8 vs 52.9 f/c and 53.4 in Nov) add to negative outlook.
Also, fading expectations of BoE’s rate hike in 2019 and persisting fears about no-deal Brexit, maintain pressure on pound, as focus turns towards 14 Jan parliamentary vote on PM May’s Brexit withdrawal agreement.
Daily techs show MA’s in bearish setup and momentum breaking into negative territory also weigh.
Consolidation above cracked key support at 1.2476 (12 Dec low) is expected to precede fresh weakness, with eventual close below here to generate strong bearish signal for extension of broader downtrend.
Converged 5, 10 & 20SMA’s mark strong resistance at 1.2650 zone which is expected to limit stronger upticks.
Res: 1.2604, 1.2650, 1.2690, 1.2772
Sup: 1.2528, 1.2476, 1.2397, 1.2365
