Tuesday’s speech of BoE Governor Carney further soured the sentiment, keeping the pair in red for the third day.
Carney pointed at negative impact on growth, driven by trade conflict, lower than expected inflation and political uncertainty in the UK on rising risk of no-deal Brexit that keep pound under pressure.
Pullback from recovery high at 1.2783 (25 Jun) broke below 1.2571 (Fibo 76.4% 1.2505/1.2783) on Wednesday, opening way towards key support at 1.2505 (18 June low, the lowest since 3 Jan).
UK Services PMI is in focus for fresh signals (Jun 51f/c vs 51 prev) with weaker than expected release to accelerate bears towards 1.2500 zone.
Rising negative momentum and bearish configuration of daily MA’s, support scenario, but deeply oversold daily stochastic warns that bears may face strong headwinds on approach to 1.2505 support.
Potential upticks should stay below 1.2644 (daily Kijun-sen / base of thick 4-hr cloud) to keep bears intact.
Res: 1.2600, 1.2644, 1.2661, 1.2671
Sup: 1.2556, 1.2542, 1.2505, 1.2476
