Cable keeps firm bullish tone in early Wednesday’s trading and extends strong rally from the previous day (the pair was up 1.04% for the day in the biggest one-day rally since Nov 5), pressuring key barriers at 1.3700 zone (new multi-month high / upper 20-d Bollinger band).
Full retracement of 1.3700/1.3451 pullback suggests that corrective phase is over and larger bulls are ready to resume.
Fibo projections at 1.3763 (123.6%) and 1.3800 (138.2%) mark immediate targets, with stronger acceleration to threaten psychological 1.40 barrier.
Rising stocks and weaker dollar underpin fresh risk appetite and lift sterling, as Brexit story is currently sidelined, but worries about pandemic remain and could deflate pound.
Failure to clear 1.37 pivot would signal prolonged consolidation, with dip-buying to remain preferred scenario while the price action stays above rising 10DMA (1.3607).
Dip and close below 20 DMA would increase downside risk.
Res: 1.3703, 1.3763, 1.3800, 1.3860.
Sup: 1.3657, 1.3607, 1.3577, 1.3547.
