Cable stands at the back foot in early Thursday’s trading, ahead of key events: BoE interest rate decision, minutes of the previous meeting and quarterly inflation report, while UK PM May will meet EU leaders in attempt to agree changes in divorce deal, reached three months ago. Concerns about consequences of disorderly Brexit and recent strength of the US dollar, still driven by upbeat US jobs data, keep sterling under pressure. PM May will do her best to convince EU leaders to re-negotiate deal, while the BoE would be also heavily affected on risks on disorderly Brexit. The central bank is widely expected to stay unchanged today, while investors will be looking for more information about growth outlook and inflation. Technical studies are bearish and favor further weakness, as bears crack key support at 1.2904 (Fibo 38.2% of 1.2397/1.3217, reinforced by converged 100/30 SMA’s). Sustained break here would trigger fresh bearish acceleration towards 1.2806 (55SMA) and 1.2786 (daily cloud top). On the other side, oversold stochastic and momentum entering positive territory may obstruct bears and delay final break below 1.2904 pivot. Broken 20SMA (1.2990) is expected to keep the upside protected and guard upper pivot at 1.3033 (200SMA).
Res: 1.2944, 1.2979, 1.2990, 1.3033
Sup: 1.2897, 1.2830, 1.2807, 1.2786
