Cable is trading in red in Europe on Tuesday, following repeated failure to clearly break above 1.2500 mark, but so far holding within the previous day’s range and supported by broken Fibo 38.2% barrier at 1.2466.
Daily techs are mixed (MA’s still in bullish configuration vs sideways-moving momentum, but in negative territory and overbought stochastic).
Fundamentals are not working in favor of pound as comments from PM Johnson weakened government’s image among the citizens and expected announcement of new 3 billion pounds worth stimulus, a part of broader plans to revive the economy.
Key support at 1.2466 which kept the downside limited for the three consecutive day, is in immediate focus.
Repeated close above here would keep the pair in extended sideways mode, while close below would weaken near-term structure and risk deeper fall on break of 1.2442 (100DMA) and 1.2423 (Fibo 38.2% of 1.2251/1.2529 upleg, reinforced by 10/55DMA’s).
Alternative scenario requires eventual close above 1.2500 to generate initial bullish signal, which will look for confirmation on lift above 1.2530/32 (last Thursday’s spike high / 50% retracement of 1.2813/1.2251 descend).
Res: 1.2496, 1.2520, 1.2532, 1.2566
Sup: 1.2466, 1.2442, 1.2423, 1.2384