Cable consolidates around 1.28 handle in early Wednesday’s trading after Tuesday’s 0.5% fall on strong fall in stocks which boosted dollar on fears about global slowdown. Near-term focus is shifted lower on weakening momentum and MA’s in bearish configuration (10/20SMA bear-cross was formed today) on daily chart, while studies on lower timeframes are negative. Risk of retesting key supports at 1.2722 (15 Nov), 1.2695 (30 Oct) and 1.2661 (15 Aug) remains high, violation of which would generate strong bearish signal. Alternatively, break above 1.2895 pivot (Fibo 38.2% of 1.3174/1.2722, reinforced by falling 10SMA), below which the action in past three days repeatedly stalled, would sideline downside risk. Today’s key event is UK PM May and EU Juncker meeting, where two sides will discuss draft Brexit agreement and try to fine-tune the details of post-Brexit time and disagreements over some parts of the text. Markets will remain in sit and wait mode to get fresh signals as Brexit theme was the top event and key driver of the British pound recently.
Res: 1.2818, 1.2883, 1.2895, 1.2948
Sup: 1.2774, 1.2760, 1.2722, 1.2695
