Cable probed below 1.22 handle in European trading on Thursday, extending weakness below daily cloud and pressuring key barriers at 1.2174/64 (Fibo 38.2% of 1.1409/1.2647/7 Apr low). Stronger dollar after Fed’s Powell dismissed negative rates weigh on pound, already pressured by record GDP contraction and signals that BoE would increase QE next month. Daily techs in full bearish setup add to negative outlook. Firm break below 1.2174/64 pivots would generate reversal signal as it will signal an end of range trading since early April and also confirm double-top (1.2647/42) where 200DMA repeatedly capped recovery. Break lower would open way towards targets at 1.2028 (50% of 1.1409/1.2647) and 1.20 (psychological). Former low (1.2247) and falling 5DMA (1.2287) mark solid barriers which are expected to cap upticks and keep bears intact.
Res: 1.2247, 1.2287, 1.2309, 1.2339
Sup: 1.2174, 1.2164, 1.2131, 1.2100
