Cable fell further on Wednesday, extending previous day’s 0.8% drop and hit the lowest (1.3674) since Feb 5.
Unexpected fall of UK inflation in February (0.4% vs 0.8% f/c) contributed to negative tone from growing risk aversion.
Fresh weakness penetrated rising daily cloud (spanned between 1.3771 and 1.3543) and pressure pivotal Fibo support at 1.3641 (38.2% of 1.2675/1.4238) break of which would generate strong bearish signal for extension of corrective phase from 1.4238 (2021 peak, posted on Feb 24) through 100DMA (1.3604) and daily cloud base (1.3543).
Pending problem about possible EU’s block of vaccine exports to Britain would further sour pound’s sentiment.
Strong barriers at 1.3778 (Mar 5 former low) and 1.3805 (broken 55DMA) need to cap upticks and keep bears intact.
Res: 1.3756, 1.3778, 1.3805, 1.3869.
Sup: 1.3674, 1.3641, 1.3604, 1.3543.
