Cable traded in a choppy mode with limited downside after BOE rate cut and regained traction on much higher than expected US jobless claims.
The pair returned above 1.2800 mark after hitting the lowest in almost one month (1.2750), with subsequent bounce signaling formation of a bear-trap on daily chart (below Fibo support at 1.2779, reinforced by 55DMA).
This may generate initial signal of formation of reversal pattern, although with more work at the upside needed to validate signal (close above 20DMA at 1.2888 seen as minimum requirement).
Until then, the downside will remain vulnerable, as negative momentum continues to strengthen on daily chart).
Look for firmer direction signals on break of either pivot (1.2779 or 1.2888).
US Manufacturing PMI data (today) and Labor report (Friday) expected to provide fresh signals.
Res: 1.2830; 1.2873; 1.2888; 1.2943.
Sup: 1.2779; 1.2750; 1.2706; 1.2683.
