Cable stands at the front foot in European session on Thursday after pullback from 1.3482 (2020 high) stalled on approach to strong support zone on Wednesday. Rising 55DMA contained dip, guarding Fibo 50% of 1.2251/1.3482 (1.2866) and the top of ascending daily cloud (1.2854).
Wednesday’s action ended in bullish hammer, which points to reversal, with north-turning daily indicators so far supporting the notion.
The near-term situation however remains fragile as today’s two top events – ECB policy meeting and EU/UK emergency Brexit talks, could drive pound on either direction.
Bullish scenario requires today’s bullish close (preferably above 1.3113, Fibo 38.2%of 1.3482/1.2884) to generate bullish signal and allow for stronger recovery.
Conversely, firm break of 1.2866/54 support zone would signal extended correction of 1.1409/1.3482 (Mar-Aug rally).
Res: 1.3035, 1.3053, 1.3088, 1.3113
Sup: 1.3000, 1.2976, 1.2934, 1.2909
