Cable regained traction and bounced on Monday after completing Morning Doji Star reversal pattern. Three day pullback that followed repeated rejection at psychological 1.3000 barrier, found footstep above pivotal support at 1.2830 (04 May low) and subsequent bullish acceleration sidelined growing downside risk seen on loss of 1.2830 trigger. Fresh rally that broke above pivotal barrier at 1.2914 (10SMA) brings daily MA’s back to full bullish configuration and turns near-term focus towards 1.3000 barrier. Additional support was provided by bullish near-term studies, as Monday’s rally surged through thick hourly cloud (spanned between 1.2888 and 1.2917) which now acts as initial support. However, larger picture shows the pair in extended directionless mode, entrenched within 1.2840 and 1.3000 range, with break of either range boundary required to generate fresh direction signal. The pair is eyeing release of a batch of UK data due in coming days for clearer signals. UK CPI data are due on Tuesday and inflation is expected to pick up in April, according to the forecast for annualized CPI at 2.6% compared to 2.3% in March. UK jobs data are due on Wednesday with unemployment expected to stay unchanged at 4.7% in April, but jobless claims are forecasted to fall significantly (5.0K in Apr vs 25.5K in Mar) and Average earnings seen increasing in March, according to the forecast at 2.4% vs 2.3% in Feb. Figures at or above forecasted level would provide fresh support to sterling for final push through 1.3000 pivot, while alternative scenario sees increased downside risk for deeper pullback on downbeat UK data.
Res: 1.2946; 1.2986; 1.3000; 1.3032
Sup: 1.2914; 1.2877; 1.2843; 1.2830