Cable remains bid and extends recovery on Wednesday after bears were strongly rejected on Tuesday and daily action ended in hammer candle, generating initial reversal signal.
Upbeat UK Services and Composite PMI data for January additionally boosted pound, which was already inflated by optimistic comments of strong advance on satisfactory trade agreement between the UK and the EU after Britain officially left the union.
Daily cloud twists today and seen attractive for fresh bulls which broke above initial pivot at 1.3043 (Fibo 38.2% of 1.3209/1.2941 bear-leg) and cracked converged 10/20/30/55DMA’s (at 1.3055/70 zone).
Sustained break here would add to positive outlook and open way towards next key Fibo barrier at 1.3107 (Fibo 61.8% of 1.3209/1.2941).
However, fresh bullish sentiment could be dented by mixed daily techs (momentum and RSI are flat, stochastic negative and MA’s in bullish/neutral setup) with existing risk of recovery stall, which would require confirmation on daily close below 1.3043.
Res: 1.3075, 1.3107, 1.3132, 1.3145
Sup: 1.3043, 1.3000, 1.2962, 1.2941
