Cable holds within narrow range on Friday ahead of release of a series of UK data.
Bearish close on Thursday after repeated failure to clearly break above falling 55SMA (currently at 1.2772) and Fibo barrier at 1.2786 (50% retracement of 1.3174/1.2397) keeps the pair at the back foot, as multiple upside rejections could spark stronger bearish acceleration.
South-heading momentum and slow stochastic in attempt to reverse from overbought territory, are negative signals, with UK data expected to give more clues about near-term direction, as markets await next week’s Brexit plan vote, the key event for British pound.
UK GDP is expected to remain unchanged at 0.1% while positive forecast are seen on Industrial and Manufacturing production, as well as slight narrowing in UK trade gap.
Overall positive results would boost pound for eventual break above 55SMA, with weekly close above needed to confirm signal and shift focus towards daily cloud base (1.2854).
Weaker than expected figure, on the other side, would risk test of support zone between 1.2715 and 1.2675 (10/20/30SMA’s) close below which would generate bearish signal.
Res: 1.2772, 1.2786, 1.2803, 1.2854
Sup: 1.2715, 1.2675, 1.2648, 1.2600