Cable holds firm tone on Monday and extends last Friday’s strong rally, which formed bullish engulfing pattern on daily chart and underpinning the advance. Sentiment is mixed as Brexit talks continue to weigh while further dollar’s weakness underpins in the near-term. Monday’s rally was so far capped by falling 10SMA (1.3163, also 50% of 1.3362/1.2957 bear-leg) which also marks the lower side of a cluster of MA’s (10;20;30) between 1.3163 and 1.3207. Bulls need to clearly break above 1.3207 (30SMA/Fibo 61.8%) to generate fresh bullish signal for extension of recovery from 1.2957. Mixed daily studies provide no clear signal but risk of recovery stall exists as falling thick daily cloud continues to weigh. Return and close below falling 5SMA (1.3096) would signal an end of recovery phase and shift focus lower.
Res: 1.3163, 1.3207, 1.3267, 1.3301
Sup: 1.3118, 1.3096, 1.3049, 1.3000
