Cable maintains positive tone and returns to 1.29 zone post-vote recovery high in early European trading on Wednesday.
The negative impact from parliamentary defeat of PM May’s Brexit plan, although strong on unexpected margin of defeat (432-202 vote), was short-lived as traders took profit after dip to 1.2668 (two-week low), pushing the price swiftly to pre-vote levels.
As I mentioned in Tuesday’s comment, parliamentary rejection of the plan was widely expected, but negative action was sparked by surprisingly strong defeat and fears of disorderly Brexit.
However, pessimism among traders did not last long as current situation opens new scenarios which range from Brexit delay, new elections and possible new referendum that sidelines immediate concerns about disorderly Brexit.
Technical outlook remains bullishly aligned as Tuesday’s strong downside rejection left daily Doji candle with long tail, suggesting that the downside is protected for now.
Also, formation of 10/55SMA bull cross and strengthening bullish momentum on daily chart, add to positive signals.
Fresh bulls attack again key barriers at 1.2882/94 (daily cloud top / 100SMA, with sustained break here to signal bullish continuation and expose psychological 1.30 barrier.
Res: 1.2882, 1.2894, 1.2930, 1.3000
Sup: 1.2824, 1.2775, 1.2717, 1.2694
