Cable stands at the front foot on Tuesday and pressures previous day’s high at 1.3152, to extend gains towards converged 20/30SMA’s (1.3169/75) which guards channel resistance at 1.3219. Daily techs are slightly improved and supportive for further upside, but bulls may stall on approach to bear-channel resistance as overall trend is negative. BoE rate decision on Thursday is in focus for stronger signals, with wide expectations for dovish hike, which would further support sterling. Markets are expecting 0.25% hike on Thursday The central bank needs to raise borrowing cost in order to fight low inflation, despite weaker than expected growth. On the other side, sterling could be hit if the BoE opts for unchanged rates, as overall bearish picture is weakened by Brexit concerns and BoE on hold would add to negative outlook. Bullish scenario needs break above channel resistance line, as well as lift above falling 55SMA (1.3257) to ease persisting bearish pressure, however, stronger bullish signal could be expected on extension above 1.35 barrier (Fibo 38.2% of 1.4376/1.2957 fall). Negative scenario sees break below 1.3082 (27 July low) and 1.3055 (Fibo 61.8% of 1.2957/1.3213 upleg) as a trigger for extension towards psychological 1.30 support and key point at 1.2957 (19 July low).
Res: 1.3175, 1.3219, 1.3257, 1.3292
Sup: 1.3112, 1.3082, 1.3055, 1.3000
