Cable closed in the daily cloud on Friday, ending strong 1.2100/1.2400 rally last week. The pair was up 1.85% for the week, driven mainly by weaker dollar and broke some important technical barriers that further accelerated the rally.
Fresh upside extension in early Monday trading, took out 100 SMA barrier at 1.2407 and is pressuring daily cloud top at 1.2435, which is the highest traded in the session so far.
Firm break above the cloud is expected to generate strong bullish signal for extension of bull-leg from 1.2107 (14 Mar low) towards targets at 1.2470 zone, with attack at psychological 1.2500 barrier not ruled out.
Daily MA’s turned into bullish setup and support scenario, however, corrective dips could be expected meantime on strongly overbought slow stochastic.
Daily cloud base, reinforced by 55SMA offers solid support at 1.2379, with extend downticks required to stay above broken 20 SMA at 1.2316.
Sustained break below the latter would generate reversal signal.
Res: 1.2435, 1.2459, 1.2476, 1.2500
Sup: 1.2409, 1.2379, 1.2337, 1.2316
