Cable turned to red on Tuesday and fell to 1.3023 low in early European trading, reversing the most of Monday’s recovery that peaked at 1.3149 and was capped by falling 10SMA.
Pound remains highly volatile and sensitive on frequent and conflicting Brexit news.
Fresh weakness was sparked by rising fears about disorderly Brexit after UK lawmakers on Monday voted down again all proposed alternatives to the government’s Brexit plan.
The cabinet meets today again, while the parliament will gather on Wednesday, both to discuss next steps, but quite unlikely to break the deadlock. Caution on news that will be coming as there might be a signal for MV4 on PM May’s plan.
Technical studies remain mixed as thickening daily cloud continues to underpin (cloud top lays at 1.3030), with next strong bids at 1.3010/00 zone (bull-channel support line / Fibo 38.2% of 1.2397/1.3381 / psychological) and key 1.2977 support (200SMA / Fri low after MV3 rejection). Sustained break here would signal fresh bearish extension and expose supports at 1.2924 (100SMA) and 1.2889 (Fibo 50%). Falling 10SMA marks initial resistance at 1.3131, guarding converged 20/30SMA’s (1.3160) and only break here would sideline bears.
Res: 1.3131, 1.3149, 1.3160, 1.3198
Sup: 1.3030, 1.3010, 1.3000, 1.2977
