Cable tumbled in early European trading on Monday (down 1.1% since opening in Asia), as sentiment soured after UK PM Johnson said that UK is ready to pull out of Brexit talks and comment from senior EU official that is impossible to say if there will be an EU/UK trade deal.
Fresh bearish acceleration so far hit the lowest levels since 19 Nov and pressuring key support at 1.3208 (Fibo 38.2% of 1.2675/1.3538 rally / 30DMA).
Firm break here would complete reversal pattern on daily chart, following Friday’s Doji candle with long upper shadow on false break above key barrier at 1.3482 (former 2020 high, posted on 1 Sep) and unsuccessful attempts to penetrate the base of monthly cloud.
Falling 14-d momentum on daily chart is about to break into negative territory, RSI and stochastic are heading south, supporting fresh bears, as the action is also heavily weighed by falling thick monthly cloud.
Bears are also attracted by thinning daily cloud which twists next week and loss of 1.3208 pivot risk drop to 1.3107 (50% retracement / 12/13 Nov higher base) and 1.3080/66 (converged ascending 55/100DMA’s), which guard key support at 1.3000 (psychological / Fibo 61.8% of 1.2675/1.3538).
Res: 1.3295, 1.3335, 1.3361, 1.3380.
Sup: 1.3208, 1.3165, 1.3129, 1.3107.
