Cable eases on Thursday as traders collect profits from Wednesday’s 1.56% advance (the biggest one-day rally since 27 Mar) when pound rose to the highest in over seven weeks against the dollar.
Sterling surged on fresh optimism over news about continuation of Brexit talks and generated bullish signals on close above daily cloud top and former high (1.3082).
Rally also cracked pivotal Fibo barrier at 1.3173 (61.8% of 1.3482/1.2675 descend) but failed to close above.
Positive sentiment over Brexit talks would further inflate sterling if two sides manage to break the deadlock move negotiations towards agreement, but traders remain cautious as another stall of talks would risk deeper fall of pound.
Bulls remain in control for now with dips to offer better buying opportunities while holding above 1.3082, however narrowing daily cloud will twist next week and could drag the price lower.
Former key barriers at 1.3017/00 (55DMA / psychological) reverted to pivotal supports and need to hold deeper dips and keep near-term action biased higher.
Res: 1.3152, 1.3177, 1.3200, 1.3291
Sup: 1.3082, 1.3064, 1.3030, 1.3017
