Cable holds in red in early European trading on Monday, as repeated attempts to penetrate daily cloud failed.
Daily cloud is falling and thickening and provides significant resistance, in addition to negative signal from bearish divergence on daily slow stochastic and indicator’s reversal from overbought territory.
Deeper pullback could be expected if the price dips below 55SMA (1.2774) but near-term structure is still bullish and the action under daily cloud could be of corrective nature while the price holds above pivotal supports provided by 10&20SMA’s (1.2738 & 1.2684 respectively).
All eyes turn towards Tuesday’s parliamentary vote on Brexit plan, with wide expectations that the plan will be rejected, but signals that Brexit 29 March deadline would be extended by the EU until at least July, would be supportive factor for the pound.
Res: 1.2843, 1.2877, 1.2927, 1.2958
Sup: 1.2774, 1.2738, 1.2684, 1.2631
