Cable stands at the back foot in early European trading after opening lower on Monday, as polls showed UK PM May’s lead reduced. The pair returned below 1.3000 level which was taken out last week. Spike above 1.3000 on Thursday and eventual close above it on Friday, generated bullish signal, as cable was up 1.2% for the week. Bullish technical studies and strong bullish sentiment are seen as supportive factors for further advance. On the other side, the rally is facing strong headwinds from descending weekly cloud base, which continues to limit attempts above 1.30(cloud base currently lies at 1.3016). Politics may also weigh on pair’s near-term action. The pair is so far holding within 1.2964/1.3022 range and still away from strong supports at 1.2934/19, provided by converging 10 and 20 SMA’s. Break here would weaken near-term structure and risk further easing. Key near supports lay at 1.2843/30.
Res: 1.3000, 1.3022, 1.3046, 1.3100
Sup: 1.2964, 1.2934, 1.2919, 1.2889
