Cable is up and remaining constructive in early Thursday’s trading despite Fed surprise, which showed limited negative impact.
Upbeat UK retail sales numbers in Nov (m/m 1.4% vs 0.3% f/c, y/y 3.6% vs 1.9% f/c) helped renewed bulls to extend and crack pivotal 20SMA (1.2693) under which the action in last two days stalled.
The BoE MPC is meeting today with wide expectations for unchanged rates amid Brexit uncertainty, with minutes of the previous policy meeting, also due today, showing wide expectations for unanimous vote for leaving rates unchanged.
Brexit remains the key influence on sterling, with fresh twist on Brexit saga coming from the comments that another Brexit vote is still possible.
Eventual break above falling 20SMA would generate initial bullish signal, confirmation of which requires extension and close above key near-term barriers at 1.2743/52 (Fibo 38.2% of 1.3174/1.2476/falling 30SMA).
Stronger momentum underpins, but still weak daily techs and prevailing negative sentiment threaten of another recovery stall, which would fuel scenario that favors selling upticks under 20SMA.
Res: 1.2705, 1.2743, 1.2752, 1.2810
Sup: 1.2640, 1.2626, 1.2677, 1.2564
