Cable is holding within narrow range in early Friday’s trading after Thursday’s close in red and formation of bearish engulfing pattern, which requires confirmation on Friday’s bearish close.
Sterling was dragged by weaker Euro on disappointing EU data and dovish ECB, but main focus remains on Brexit.
The pair is on track for bearish weekly close, following three weeks in green and strong rallies in previous two weeks, which could be initial negative signal after the advance showed signs of stall at psychological 1.30 barrier.
Early Friday’s action probes again below rising 10DMA (1.2852) which contained previous day’s fall despite being cracked on dip to 1.2788.
Firm break below 10DMA would unmask key supports at 1.2713/00 (200DMA / Fibo 38.2% of 1.2195/1.3012), violation of which would generate reversal signal.
The upside remains protected by 1.30 barrier (also weekly cloud twist) and sustained break here would signal an end of corrective phase and shift near-term focus higher.
Quiet mode is expected to remain until more news about UK snap election and EU’s discussion over another Brexit extension will be released.
Res: 1.2862, 1.2887, 1.2950, 1.3000
Sup: 1.2823, 1.2788, 1.2749, 1.2713
