Cable holds in red in European trading on Wednesday and dipped below 1.2700 handle, pressured by sales by risk aversion sales of GBPJPY pair.
Repeated failure to clearly break above 1.2743 pivot (Fibo 38.2% of 1.3174/1.2476 downleg) after Friday’s action spiked to 1.2814 but closed below 1.2743, weighs on near-term action.
Strong bullish momentum on daily chart continues to underpin, along with formation of 10/20SMA bull-cross (1.2654), suggesting that current easing could be positioning for fresh upside, while 20SMA (1.2655) holds.
Bulls need confirmation on close above 1.2743 Fibo barrier to open way towards 1.2812 (falling 55SMA) and possible extension towards more significant resistances at 1.2897/1.2916 zone (100SMA/Fibo 61.8%/ base of falling daily cloud).
Conversely, negative signal would be generated on close below 20SMA, with extension below 1.2605 (Fibo 61.8% of 1.2476/1.2814 recovery leg) to signal an end of corrective phase and shift focus lower.
Res: 1.2743, 1.2772, 1.2812, 1.2850
Sup: 1.2683, 1.2655, 1.2605, 1.2555
