Cable remains in defensive mode in early Thursday, following previous day’s fall that retraced the largest part of Tuesday’s strong rally.
Today’s action is holding within narrow range and in thin daily cloud, but pressures cloud base (1.2238). Return and close below cloud base would further weaken near-term structure and risk dip towards 1.2161 (22 May higher low).
British pound is pressured by uncertainty over Brexit trade negotiations and possibility of introducing negative interest rates on severe damage to the economy, caused by coronavirus lockdown.
This suggests that weakness may extend, but bears need break of cloud base and 1.22 zone (Wed’s low) to confirm scenario.
Res: 1.2281, 1.2304, 1.2329, 1.2354
Sup: 1.2238, 1.2218, 1.2204, 1.2161