Cable stands at the back foot in early Tuesday’s trading, pressured by fresh risk-off mode, sparked by IMF’s downgrade of global growth forecast.
Also, traders remain concerned about the Brexit scenario after PM May revealed her plan B yesterday, opposing second referendum and saying that March 29 deadline won’t be extended, even on no-deal Brexit.
Despite weaker tone, the pair holds above daily cloud top (1.2866), following Monday’s close above cloud after spike lower to 1.2830.
Near-term action is also supported by rising 10SMA (1.2860) and fresh bullish momentum on daily chart that so far keeps the downside limited, while south-heading slow stochastic maintains pressure.
Solid resistance at 1.2897 (100SMA) continues to cap for the second day, with break of either side to generate fresh direction signal.
UK jobs data are in focus today, with earnings expected to stay unchanged at 3.3% in Nov, jobless claims forecasted lower (20.0K vs 21.9K previous) and unemployment also unchanged at 4.1% in Nov.
Positive scenario on stronger than expected UK wages would boost pound through 100SMA and re-expose psychological 1.30 barrier.
Weaker than expected wages data would put pound under pressure and risk dip into thick daily cloud for test of supports at 1.2770/80 (converging 20/55SMA’s), possibly to extend towards key support at 1.2715 (daily cloud base, reinforced by 30SMA).
Res: 1.2892, 1.2953, 1.3000, 1.3088
Sup: 1.2860, 1.2830, 1.2780, 1.2715