Cable is consolidating within narrow range above Wednesday’s nine week low (1.2675) after bears managed to close below the base of thick daily cloud but failed to register close below next pivotal support at 1.2690 (Fibo 38.2% of 1.1409/1.3482).
Wednesday’s long-legged Doji candle points to indecision, as bears face headwinds from key support zone at 1.2719/1.2690 (200DMA / Fibo 38.2%) and deeply oversold stochastic.
Near-term sentiment remains negative as risk aversion and drop in equities continue to inflate dollar, while some positive tones could be heard on optimism on Brexit talks.
Consolidation is likely to precede final break of 1.2690 pivot that would open way for deeper correction of 1.1409/1.3482 (Mar-Aug rally).
Daily cloud base should ideally keep the upside capped, however, stronger upticks need to stay below daily Tenkan-sen (1.2841) and maintain bearish bias.
Only break here would sideline bears for stronger correction.
Res: 1.2759, 1.2782, 1.2841, 1.2866
Sup: 1.2690, 1.2675, 1.2643, 1.2600
