Cable continues to trend higher, driven by strong Brexit optimism, with additional boost from weaker dollar from US election split.
Sterling hit new three-week high in early European session on Wednesday, in extension of strong rally from 1.2695 (30 Oct low), which generated bullish signal on Tuesday’s close above daily cloud.
Impressive near-term performance of British pound which advanced over 3% on strong bullish acceleration from 1.2695 low, could extend further as today’s rally broke above barrier at 1.3125 (Fibo 76.4% of 1.3257/1.2695 / weekly 100SMA) and momentum broke into positive territory.
Bulls eye next barrier at 1.3187 (falling weekly 30SMA) where strong headwinds could be expected as daily slow stochastic is strongly overbought and signal that rally may be paused for consolidative / corrective action.
Broken Fibo 61.8% barrier at 1.3043 (reinforced by 5/10SMA bull-cross) is expected to hold dips and keep bulls in play.
Res: 1.3155, 1.3187, 1.3235, 1.3257
Sup: 1.3125, 1.3073, 1.3043, 1.3016
