Cable accelerated to new ten-week low at 1.2755 in late Asian / early European trading on Tuesday, ending brief consolidation of past two days and signaling continuation of larger downtrend.
Persisting fears of Brexit no-deal scenario keep pound under pressure for push towards target at 1.2661 (15 Aug low) after last two significant supports en-route (1.2811 – Fibo 76.4% and 1.2785 – 05 Sep trough) were broken.
After UK Fin-Min Hammond in budget report on Monday said that austerity is connected to Brexit talks and will end with Brexit deal, with some positive tone about slowdown in UK economy since Brexit vote, which slowed less than expected.
With BoE MPC expected to stay unchanged on Thursday’s meeting and no news about Brexit, in this case meaning bad news, sterling would likely keep its current direction.
Strong bearish setup of daily techs supports scenario, with corrective actions on oversold studies expected to provide better selling opportunities.
Broken Fibo support at 1.2811, reinforced by falling 5SMA marks initial resistance, with stronger upticks to be capped at 1.2920 zone (former higher base, reinforced by falling 10SMA) and keep bears intact.
Res: 1.2811, 1.2852, 1.2904, 1.2921
Sup: 1.2755, 1.2729, 1.2697, 1.2661
