Cable moves within narrow consolidation in early Wednesday’s trading and just above strong support at 1.2722 (15 Nov low) which was approached on Tuesday’s strong fall (sterling was down 0.65% for the day).
Signals that US President Trump is on track for tariff hike boosted demand for safe-haven dollar that weakened pound’s sentiment.
Another factor that could further weaken sterling is growing fears that UK parliament may reject to verify the latest agreement between the EU and UK, which could lead to chaotic scenario on no-deal Brexit.
Bearish techs on daily chart support the notion, with consolidation expected to hold below falling 10SMA (1.2804) ahead of fresh weakness.
Violation of 1.2722 would expose 1.2695/1.2700 double-bottom (30/31 Oct) which guards 2018 low at 1.2661, break of which would spark significant downside.
Res: 1.2761, 1.2804, 1.2831, 1.2863
Sup: 1.2722, 1.2695, 1.2661, 1.2582
