Cable showed little reaction to weekend’s Brexit deal and traded within narrow range in Asia on Monday, with slightly higher levels seen in early European trading.
Near-term direction is still unclear, following last Thursday’s strong rally and subsequent fall on Friday that keeps the pair within 1.2764/1.2883 range and suggesting extended consolidation.
The pair failed to capitalize on long-awaited Brexit deal, as UK PM May now faces tough work at home, as the agreement needs an approval from the parliament.
Overall picture is bearish and keeps the downside vulnerable, with last week’s failure to close above 1.2895/1.2905 pivots (Fibo 38.2% of 1.3174/1.2722/20SMA) adds to negative signals, along with rising bearish momentum on daily chart.
Twist of daily cloud (1.3000 on 03 Dec) was less magnetic than expected but could still attract for fresh upside, with sustained break above 1.2895/1.2905 seen as minimum requirement.
Broken 10SMA marks initial resistance at 1.2850, followed by pivots at 1.2895/1.2905 and 1.2924 (falling 30SMA).
Lows of today/last Friday offer immediate supports at 1.2798/95, guarding higher base at 1.2765 and key supports at 1.2722/1.2661 (15 Nov/30 Oct lows). Lift above 1.29 zone or fall below 1.28 support zone would provide fresh direction signals.
Res: 1.2850, 1.2895, 1.2905, 1.2924
Sup: 1.2795, 1.2764, 1.2722, 1.2695
