HomeContributorsTechnical AnalysisPound Falls Below 1.39, Delated by Downbeat UK Data

Pound Falls Below 1.39, Delated by Downbeat UK Data

Cable fell below 1.3900 handle in Europe, deflated by downbeat trade balance/IP data. Trade deficit widened to 13.5 billion pounds in Dec from forecasted 11.5 billion gap, while industrial production fell by 1.3% in Dec, falling below forecasted 0.9% fall and against downward-revised previous month’s 0.3% release.

Fresh easing after recovery failed under 1.40 pivot and loss of 1.39 handle weakens near-term structure and turns near-term focus lower again, after hawkish comments from BoE on Thu/Fri showed limited and short-lived positive impact on sterling.

Temporary base at 1.3840 zone, reinforced by rising 30SMA is coming under increased pressure as risk of continuation of pullback from 1.4277 lower top is intensifying.

Thursday’s strong upside rejection above 1.40 which left daily candle with long upper shadow, weighs on near-term action for renewed attack at 1.3840 base.

Firm break here would open next strong support at 1.3796 (Fibo 61.8% of 1.3457/1.4344 upleg) and could trigger stronger bearish acceleration on break lower.

Broken 1.39 point now acts as initial resistance and guarding pivotal barrier at 1.4000 (20SMA / psychological barrier).

Res: 1.3900; 1.3986; 1.4000; 1.4033
Sup: 1.3854; 1.3835; 1.3796; 1.3667

Windsor Brokers Ltd
Windsor Brokers Ltdhttp://www.windsorbrokers.com/
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