Pound extended last Friday’s fall in Asian session today and cracked strong support at 1.2400 (converged 55/100SMA’s), after Thursday’s strong rally was capped by Fibo 61.8% barrier at 1.2567.
Fresh weakness came on renewed talks about Scotland’s independence referendum, with investors also focusing on Tuesday’s speech of US President Donald Trump for more clues about expected tax reform.
Near-term focus has turned lower again, with daily cloud top (1.2379) being under pressure.
Daily technical studies are returning to bearish setup that increases risk of further weakness.
Close below 55/100 SMA is seen as initial trigger for fresh extension lower, with break below next set of pivotal supports at 1.2379 (daily cloud top) and 1.2345 (weekly Tenkan-sen), needed to confirm bearish scenario.
Meantime, consolidation above 1.2400 handle should stay capped by daily Tenkan-sen at 1.2475, to keep negative sentiment in play.
Alternative scenario requires break and close above 1.2475 barrier for renewed attempts at upper breakpoints at 1.2567/80.
Res: 1.2433, 1.2457, 1.2475, 1.2500
Sup: 1.2400, 1.2379, 1.2345, 1.2300
