Cable is holding near one-week high at 1.2725, posted on strong post-Fed bullish acceleration, as weak UK retail sales data (May m/m -0.5% vs -0.1% prev/y/y 2.3% vs 5.1% prev) had mild impact on bulls.
Dovish Fed axed the greenback, while more positive tones which diminish fears of no-deal Brexit, further improved the outlook.
Bulls broke above falling 30SMA (1.2705), the last obstacle on the way to key barriers at 1.2763 (double-top/Fibo 38.2% of 1.3179/1.2505 fall), violation of which is expected to generate stronger bullish signal.
BOE MPC meeting is the key event for pound today, with traders expecting the central bank to reiterate its message of interest rate hike, despite Fed’s strong dovish stance that further improves the sentiment.
Sterling advanced nearly 1.5% in three days on bounce from new low at 1.2505 (18 June), with sustained break of 1.2763 pivot to spark extension of recovery from 1.2505 and expose targets at 1.2842 (50% retracement of 1.3179/1.2505) and 1.2872 (weekly cloud base).
Converged 10/20SMA’s offers solid support at 1.2658/54, which needs to hold and maintain bullish bias.
Res: 1.2725, 1.2763, 1.2810, 1.2842
Sup: 1.2654, 1.2631, 1.2606, 1.2559