Cable jumped to the session high at 1.2859 in early Monday’s trading following the latest news that the EU will most likely delay Brexit until 31 Jan.
Fresh optimism inflated pound and adds to positive signal that is developing on daily chart, after pullback from 1.3012 (21 Oct high) repeatedly failed to close below cracked Fibo support at 1.2319 (23.6% of 1.2195/1.3012) and was contained by rising daily Tenkan-sen.
Strong daily bullish momentum supports the notion, with extension and close above broken 10DMA (1.2874) seen as minimum requirement for reversal signal.
Conversely, eventual close below 1.2319 would signal extended pullback and unmask key supports at 1.2713 (200DMA) and 1.2700 (Fibo 38.2% of 1.2195/1.3012).
Brexit themes remain pound’s key driver and markets will continue to focus on them.
Res: 1.2859, 1.2874, 1.2950, 1.3000
Sup: 1.2819, 1.2788, 1.2749, 1.2713
