Weaker dollar pushed sterling from one-week low in Asian trading on Monday, but recovery attempts from one-week low at 1.2986 (Friday) following two-day 1% fall, are likely to be limited.
Friday’s bearish close within daily cloud (after thick ascending cloud underpinned the action in past couple of weeks) was negative signal.
Strong bearish momentum and bearish crosses of daily MA’s add to negative tone for final attack at key 200SMA support (1.2977) which was approached on Friday.
Bears need confirmation on close below 1.3005 (Fibo 38.2% of 1.2397/1.3381) and 200SMA that would signal extension of short-term downtrend from 1.3381 (2019 high posted on 13 Mar) towards 1.2932 (100SMA) and 1.2889 (50% retracement of 1.2397/1.3381).
Recovery stays under strong barriers at 1.3091/99 (daily cloud top / 10SMA) for now and keep bearish bias.
Break higher would ease pressure, but only close above 1.3157/65 (20/30SMA’s) would sideline bears.
Brexit clock is ticking but all options remain on the table as key information, how and when the UK will leave EU, are still not known.
Confusion in the UK following the most recent talks between PM May’s party and the opposition, as May says they are close to find a deal and the opposition disagrees, maintains high uncertainty.
May asked the EU for extension till 30 June, but little progress on this subject was seen so far, as some EU members expressed doubts about May’s plan to further delay Brexit.
EU emergency summit on Brexit is the key event and expected to give more details about final steps of divorce process.
Res: 1.3072, 1.3091, 1.3122, 1.3156
Sup: 1.3025, 1.3005, 1.2977, 1.2932
