Cable remains constructive and pressures 1.3200 barrier, as fresh strength broke above previous day’s high at 1.3181 and also dented pivotal Fibo barrier at 1.3191 (Fibo 61.8% of 1.3257/1.3083 bear-leg) in early Tuesday’s trading.
The pair dipped to 1.3083 on Monday, following failure on Brexit talks during the weekend, but regained tractions and recovered previous losses.
Brexit talks remain pair’s main driver, with focus on EU summit which starts on Wednesday, when two sides will try to find way to continue talks which stalled on the Northern Ireland’s border issue.
The latest comments from top EU officials show willingness to continue talks and urging both sides to do their best, but warning that no-deal Brexit scenario is more likely than ever before and that the bloc must be ready for such scenario.
Daily techs are bullishly aligned and supportive (momentum is breaking into positive territory and daily MA’s turned to full bullish configuration) for further upside to fully retrace 1.3257/1.3083 pullback.
UK data are in focus today, with jobless claims forecasted lower in Sep (4.5k f/c vs 8.7K previous) and unemployment expected to stay unchanged at 4.0% in Aug.
UK earnings data will be closely watched for fresh signals. Forecast for Aug is unchanged at 2.6%, with better than expected result to inflate pound for 1.32+ gains, while weaker than expected figure could put sterling under pressure.
Res: 1.3200, 1.3217, 1.3257, 1.3297
Sup: 1.3181, 1.3139, 1.3120, 1.3096
