Cable remains at the back foot but holding just above new 28-month low (1.1898) hit after Tuesday’s 1.37% drop).
Fresh bears cracked former low at 1.1933 (June 14) and 1.1930 (Oct 2016 low) but failed to register a daily close below on a first attempt.
Sterling was dragged by weakening Euro and pressured by recession fears and political turmoil in Britain, as two ministers of the Johnson’s cabinet resigned on Tuesday that increased odds that Boris Johnson will be replaced as Prime Minister before 2023.
Technical studies, in addition to negative fundamentals, remain bearish and support the action, though psychological 1.20 is still providing headwinds, with sustained break lower to signal continuation of a larger downtrend which was paused since 2016.
Break of 1.20/1.1930 support zone will open way towards pandemic low at 1.1409 (Mar 2020), with stronger acceleration to risk drop towards 1.10 and possibly unmask parity level, as many analysts already talk about such scenario.
Falling 10DMA (1.2134) should cap upticks and keep bears in play.
Res: 1.2000; 1.2045; 1.2114; 1.2170.
Sup: 1.1898; 1.1822; 1.1751; 1.1697.
