Cable moved higher in early Monday’s trading, consolidating above thick daily cloud, after cloud top contained Friday’s sharp fall and continues to support the action.
Sterling crashed on Friday after Brexit-negative news, but Monday’s action was so far unaffected from more negative news that came over the weekend.
Near-term sentiment was soured by Friday’s fall, while daily techs give mixed signals (slow stochastic in steep descend and Friday’s close below 10SMA were negative signals, while momentum continues to strengthen and thick daily cloud underpins recovery attempts).
While strong supports at 1.3054 (daily cloud top/Fibo 38.2% of 1.2661/1.3297) hold, hopes for stronger recovery will exist, but sustained break above 10SMA (1.3115) is needed to confirm. Further bullish signal could be expected on break and close above broken 100SMA (1.3151), also Fibo 38.2% of 1.3297/1.3054 pullback, which would signal higher base (1.3054) and open way for stronger recovery.
On the other side, bearish signal could be expected on close below 1.3054 pivot, with extension below 1.3025/00 (20/55SMA) to signal reversal and open way for further retracement of larger 1.2661/1.3297 uptrend.
Res: 1.3115, 1.3151, 1.3176, 1.3204
Sup: 1.3054, 1.3025, 1.3000, 1.2980
