Cable holds in green for the third straight day and rises to one-week high after larger bears found temporary footstep and sentiment improves on dovish tones from Fed. Yesterday’s comments from Fed St Louis president Bullard that US rate cut may be warranted soon and expectations for dovish shift of Fed chief Powell, who is due to speak later today, maintain negative outlook ahead of 19 June Fed policy meeting. Possibilities of further recovery rise on positive signals from Friday’s hammer candle and Monday’s marginal close above 10SMA, with north-heading daily momentum adding to positive tone. Bulls require further signals on extension above 1.2747 (27 May high) and 1.2760 (falling 20SMA) that would expose key barrier at 1.2796 (Fibo 38.2% of 1.3179/1.2559), break of which would generate reversal signal and open way for stronger recovery. Overall picture remains bearish, as pound is under strong pressure on fears of no-deal Brexit and limited recovery may offer better selling opportunities before broader bears resume. Return and close below 5SMA (1.2637) would confirm negative scenario and expose key 1.2559 support (31 May spike low) .
Res: 1.2686, 1.2705, 1.2747, 1.2760
Sup: 1.2655, 1.2637, 1.2605, 1.2559
