Cable ticked higher in early Monday’s trading, following strong downside rejection and bullish close on Friday.

Weaker dollar offers temporary support to sterling, with idea of stronger recovery being supported by formation of bullish divergence on daily Stochastic / RSI.

However, pound remains heavy on Brexit concerns, with downbeat UK Manufacturing PMI data (May 49.4 vs 52.0 f/c and 53.1 prev) adding to negative signals.

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Upside attempts were so far capped by falling 10SMA (1.2656), but stronger upticks on price adjustment cannot be ruled out.

Bearish bias is expected to remain in play while the price action holds below 1.2747 (27 May high / lower top of larger downtrend), with dips below 1.25 handle expected on violation of Fibo support at 1.2508 (76.4% of 1.1930/1.4376 rally).

Only sustained break above 1.2747 would sideline bears and allow for recovery towards key barriers at 1.2779 (20SMA) and 1.2796 (Fibo 38.2% of 1.3179/1.2559).

Res: 1.2656, 1.2705, 1.2747, 1.2779
Sup: 1.2625, 1.2605, 1.2559, 1.2508

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