Cable extends gains on Wednesday and holding firmly in green for the second straight day, driven mainly by positive Brexit news.
Strong double downside rejections just above key daily cloud top support sidelined downside risk, with fresh acceleration higher being boosted by news that divorce agreement between The EU and Britain could be reached very soon.
Fresh extension higher on Wednesday broke above pivotal barrier at 1.3154 (Fibo 61.8% of 1.3297/1.2921 bear-leg) with close above to confirm bullish signal for extension above 1.3200 (Fibo 76.4% at 1.3209 and 26 Sep lower top at 1.3217).
Bullishly aligned daily MA’s turned to full bullish setup and attempting to formed double bull-cross (5/20 and 5/100SMA) while 20/100SMA’s converged and on track to form another bull-cross.
On the other side, weak momentum and overbought slow stochastic warns of stall.
Broken Fibo barrier at 1.3154 marks initial support ahead of next strong level at 1.3100 (converged 5/20/100SMA’s) which is expected to contain and keep near-term bulls in play.
Batch of UK data is in focus today (UK GDP, Manufacturing / Industrial production, Trade data) and could provide fresh direction signals.
Res: 1.3185, 1.3217, 1.3276, 1.3297
Sup: 1.3154, 1.3100, 1.3066, 1.3052