Cable cracked psychological 1.40 barrier today, posting new post-Brexit vote recovery high at 1.4002, but was unable to sustain break at first attempt and eased back to 1.3940 in early European trading.
Further consolidation before final break higher could be expected as daily studies are overbought and traders started to take profits on larger longs at 1.40 target.
However, overall strong bullish sentiment keeps pound well supported and clear break above 1.40 pivot would trigger stops parked above and spark fresh bullish acceleration towards 1.4100 (round-figure barrier) and 1.4123 (FE 161.8% of current wave C of five-wave sequence from 1.3038).
Buying on correction remains favored scenario, with 4-h Tenkan-sen marking initial support at 1.3929, followed by Kijun-sen at 1.3879 and hourly trough at 1.3838 (18 Jan low).
Key near-term support lies at 1.3787 (rising 10SMA) and extended dips should reverse above it to keep bullish structure intact and avoid risk of deeper pullback seen on break.
Res: 1.4002, 1.4050, 1.4100, 1.4123
Sup: 1.3929, 1.3879, 1.3838, 1.3804
