Cable jumped above 1.24 barrier as BoE stayed unchanged on interest rates and QE as four-day drop faced headwinds from daily cloud top, which was tested overnight. Bounce was so far capped by strong barriers provided by converged 10/20/55 DMA’s (1.2435/44 zone) and subsequent easing below 1.24 handle suggesting that recovery attempts might be short-lived. Negative momentum and MA’s in bearish setup on daily chart keep the near-term tone negative, while the price stays below 1.2435/44 pivot. On the other side, daily cloud provides solid support and keeps the price afloat but within narrow range. Expect direction signals on break of either side with violation of cloud top to expose 1.2247 (21 Apr low) break of which would generate initial signal of double-top (1.2642/47) and risk further weakness. Conversely, lift and close above 10/20/55DMA’s would signal formation of higher low and open way for fresh push towards 200DMA (1.2646).
Res: 1.2417, 1.2435, 1.2444, 1.2476
Sup: 1.2309, 1.2247, 1.2205, 1.2174
