Cable extends weakness into fourth straight day and tests levels below 1.29 handle, following Wednesday’s 0.6% fall and close below pivotal supports at 1.2931/19 (rising 100DMA/Fibo 38.2% of 1.1958/1.3514).
Stronger than expected rise in UK inflation had minor impact on pound which maintains strong bearish sentiment, weighed by EU/UK trade friction and rising dollar. Bears pressure key support at 1.2871 (10 Feb low) loss of which would spark fresh bearish acceleration towards 1.2822 (22 Nov low) and 1.2768 (8 Nov low), which guard 1.2736 (50% retracement) and 1.2689 (200DMA).
Daily MA’s in bearish setup and rising negative momentum are supportive, but oversold stochastic warns.
UK retail sales (Jan m/m 0.7% vs -0.6% prev) are in focus, with strong reading to inflate pound and slow bears.
Upticks are expected to offer better opportunity to -re-enter bearish market, with broken supports at 1.2919/31 to ideally cap and keep intact falling 10DMA (1.2961), close above which would put immediate bears on hold.
Res: 1.2919, 1.2931, 1.2961, 1.3000
Sup: 1.2883, 1.2871, 1.2822, 1.2768
