Cable extends advance above 1.21 mark on Thursday, hitting the highest since mid-August, following Wednesday’s 1.4% rally, which resulted in close above pivotal barriers at 1.2000/28 (psychological/former high of Nov 15.
Fresh advance signals bullish continuation after larger uptrend was paused for consolidation.
Bulls focus initial target at 1.2190 (falling 200DMA), which guards 1.2299 (50% retracement of 1.4249/1.0348 fall/Aug 1 lower top).
Daily studies are in bullish setup but fading bullish momentum and overbought stochastic warn that bulls may face headwinds on approach to 200DMA barrier.
Broken 1.20 level reverted to support which should ideally contain dips, though dip-buying to remain favored while the action stays above rising daily Tenkan-sen (1.1921).
Sterling continues to benefit from weaker dollar, additionally pressured by dovish Fed minutes and overall soft US data, released on Wednesday.
Res: 1.2190; 1.2299; 1.2332; 1.2406.
Sup: 1.2081; 1.2000; 1.1921; 1.1778.