Cable regained traction and bounced to 1.3148 (falling 10SMA) in early Wednesday’s trading, following highly volatile action on Tuesday, when the pair trade within nearly 300-pips range.
The British Parliament rejected again PM May’s Brexit deal on Tuesday’s vote, keeping high uncertainty and deepening political turmoil, just two weeks ahead of planned departure date on 29 March.
Parliament will gather again today and vote whether the Britain will leave the EU without deal, with wide expectations to reject such scenario and vote on Thursday on potential extension of departure time.
Sterling is expected to remain vulnerable, as all possible scenarios are still pending and high volatility could be expected until decisions are made.
Wednesday’s dip to 1.30 zone was short-lived as 200SMA continues to underpin and protect the downside, along with daily cloud top.
Rising bullish momentum adds to positive near-term signals, but resistance at 1.3148 is significant (10SMA / Tuesday’s post-vote high) and sustained break here is needed to signal further recovery.
Choppy mode is expected to continue until parliament’s decisions that would provide fresh direction signals.
Lower triggers are marked by 200SMA and daily cloud top and firm break lower would generate negative signals.
Bullish signal could be expected on close above cracked 1.3200 Fibo barrier (61.8% of 1.3349/1.2960 pullback.
Res: 1.3156, 1.3200, 1.3257, 1.3288
Sup: 1.3124, 1.3098, 1.3051, 1.2987
