Cable stands at the back foot in early Monday’s trading following bearish close last week, but bears continue to face strong headwinds from strong supports at 1.3682/70 (100DMA / Mar 25 low).
Long lower shadows on Friday’s and Monday’s candles point to strong demand at this zone that may keep bears on hold for some time, as daily techs are mixed (daily MA’s 10/20/30/55) are in bearish configuration but stochastic is reversing in oversold territory and momentum is heading north towards the centreline.
Sterling remains supported by vaccination optimism and an action of UK lawmakers and business figures in forming an independent commission to improve Britain’s post-Brexit trade deal with the EU and the rest of the world, but the case with the AstraZeneca vaccine continue to sour the sentiment.
Near-term bias is expected to remain with bears and keep the downside in focus, while the price stays below the base of narrowing daily cloud (1.3790) reinforced by the Tenkan-sen line.
Final break of 1.3682/70 pivots would generate an initial signal of bearish continuation, which would require confirmation on extension and close below key Fibo support at 1.3641 (38.2% of 1.2675/1.4238).
Conversely, a sustained break above 1.38 zone would put bears on hold.
Res: 1.3750, 1.3776, 1.3790, 1.3836.
Sup: 1.3682, 1.3670, 1.3641, 1.3609.
