Cable regained traction and probed above 1.25 marks, cracking important Fibo barrier at 1.2516 (61.8% of 1.3199/1.1409) in lower-volume Easter Monday trading.
Bulls returned to play after pausing on Friday, with attempts through initial barrier at 1.2484 (27 Mar /10 Apr range top) and 1.2500/16 pivots, on track to generate bullish signal if bulls sustain break and close above these levels.
Risk of fresh rally’s stall and another daily close below 1.2485 exists, as momentum on daily chart is heading south after bearish divergence has been formed.
Weekly cloud, which capped the action in past four weeks threatens to limit gains again (cloud base lays at 1.2521), along with 55/200 death-cross that formed last Thursday.
In addition, fundamentals are worsening, as death toll in the UK on coronavirus rises Britain’s finance minister warned that the economy could shrink up to 30% this quarter on pandemic lockdown that would have strong negative impact on sterling.
Near-term action is expected to maintain slight bullish bias even if it fails to break higher again, as long as 10 DMA (1.2371) holds, but traders must be very cautious as multiple failures to clear pivotal 1.2485 barrier could result in pullback which would accelerate on break of 10DMA and 7 Apr trough at 1.2164.
Res: 1.2516; 1.2536; 1.2626; 1.2647
Sup: 1.2452; 1.2420; 1.2371; 1.2304
