Cable holds in red in early Tuesday and extends weakness off new high at 1.3217 into second straight day.
Technical indicators started to point lower on daily chart, suggesting further corrective easing, but the action could be limited as indicators did not generate firmer negative signals and daily MA’s are still in full bullish setup and supportive.
Ideally, corrective action should find ground above broken 200SMA (1.3062) to keep larger bulls intact for retest of new 14-week high and extension of bull-leg from 1.2476 towards targets at 1.3257 (12 Oct high) and 1.3297 (20 Sep high).
Conversely, break below 200SMA would risk test of other pivotal supports at 1.3023 (10SMA) and psychological 1.30 support, loss of which would generate stronger bearish signal.
Traders expect increased volatility as UK lawmakers vote today on Brexit amendments, in attempt to shape country’s exit from the EU and give clearer signal what type of Brexit they will support.
Res: 1.3169, 1.3217, 1.3257, 1.3297
Sup: 1.3129, 1.3114, 1.3062, 1.3023
