Cable stands at the back foot and hit session low at 1.3334 in early European trading on Friday, following short-lived recovery attempt to 1.3421 on Thursday.
Near-term tone softened after warning from BoE Governor Carney on Thursday who said that the central bank could return to stimulus if needed after Brexit.
Broader weakness found footstep at 1.3305, provided by lower 20-d Bollinger band and holds within narrow consolidation for the second straight day.
Bearish setup of daily MA’s / momentum keeps downside at risk, with focus on UK GDP data (the second GDP estimate – q/q f/c 0.1% vs 0.1% prev, annualized f/c 1.2%, also unchanged from the previous) which may provide stronger direction signals.
The first estimate was below expectations and pound was hit hard and similar scenario could be expected on GDP miss today.
Continuation of larger downtrend from 1.4376 (post-Brexit recovery high) could extend towards 1.3205 (top of rising weekly Ichimoku cloud).
Extended consolidation could be expected while 1.3305 holds while stronger recovery would be signaled on break and close above falling 10SMA (1.3446).
Res: 1.3387, 1.3421, 1.3446, 1.3491
Sup: 1.3334, 1.3305, 1.3250, 1.3205
