Cable ticks lower in early European trading on Friday as strong three-day rally from new low at 1.1958, faces strong headwinds from significant barriers at 1.2335 (falling 55DMA) and 1.2354 (daily cloud base).
Profit-taking at the end of the week, following 2.2% recovery, may keep bulls temporarily on hold for corrective action, as overbought daily stochastic and south-turning momentum add to signals.
Corrective easing would face little support until 1.2200 zone, where 10DMA and Fibo 38.2% of 1.1958/1.2353 recovery, offer solid support.
Extended dips should be contained here to keep near-term bulls in play for fresh attempts at 1.2335/54 pivots, as sentiment remains positive on renewed Brexit optimism.
Loss of 1.2200 handle would weaken near-term structure and risk test of other pivotal support at 1.2172 (20DMA).
The pair is on track for strong bullish weekly close that may generate significant bullish signal as bullish engulfing pattern is forming on daily chart. With no releases from UK scheduled today, focus turns towards US jobs data.
Non-farm payrolls are expected to remain solid in Aug (160K f/c vs 164K prev), unemployment unchanged at record lows (3.7%) and earnings stable (0.3%) that may give fresh boost to the greenback on releases at/above expectations and prompt deeper correction of GBPUSD pair.
Res: 1.2335, 1.2354, 1.2370, 1.2382
Sup: 1.2296, 1.2260, 1.2202, 1.2172
