Cable is regaining traction after consolidation in Asian session and probing through 55SMA / 50% of 1.3174/1.2397 bear-leg (1.2783/86), where three-day rally faced strong headwinds on Monday.
Pound moved higher after markets digested newspapers report about extending the formal exit process, with upbeat UK housing data (Dec HPI y/y 1.3% vs 0.4% f/c and m/m 2.2% vs 0.5% f/c) adding to positive tone.
Bullishly aligned daily techs are supportive, but the pair struggles at 55SMA on volatile market ahead of next week’s vote on Brexit plan.
Bullish scenario on sustained break above 55SMA would open way for extension of recovery rally after last week’s flash crash towards key barriers at 1.2880 zone (daily cloud base / Fibo 61.8% of 1.3174/1.2397).
Conversely, the pair may hold in extended consolidation on repeated rejection at 55SMA, with rising 10SMA / top of rising thick hourly cloud at 1.2700 zone, required to hold and maintain bullish bias.
Return and close below 10SMA would weaken near-term structure, while extension below 1.2645 (20SMA / Fibo 38.2% of 1.2397/1.2796 recovery leg) would generate negative signal.
Res: 1.2783, 1.2814, 1.2850, 1.2880
Sup: 1.2746, 1.2716, 1.2693, 1.2645
