Early Wednesday’s action is holding within 30-pips range and below Tuesday’s spike high at 1.3235, awaiting fresh signals after previous day’s rally on better than expected UK earnings data stalled.
Brexit talks remain pound’s top driver with souring sentiment on concerns about progress in talks on EU summit, which starts today.
Fears of hard Brexit keep gains limited as current expectations show 25% chances that such scenario would be avoided.
Daily techs are bullishly aligned (strengthening momentum and bull-crosses of MA’s), but sustained break above 1.32 barrier (1.3191 is Fibo 61.8% of 1.3257/1.3083) is required to confirm bullish scenario for eventual attack at 1.3257 target (12 Oct high).
Rising 10SMA marks initial support (1.3144), loss of which would weaken near-term structure for test of next pivot at 1.3115 (20SMA).
Return below Monday’s low at 1.3083 would revive bears and shift focus lower.
UK inflation data are due in a while (Sep CPI y/y 2.6% f/c vs 2.7% prev / m/m 0.2% vs 0.7% prev) and expected to provide fresh direction signals.
Traders will be also focusing on FOMC minutes of September’s meeting to get more clues on the greenback’s near-term direction.
Res: 1.3192, 1.3216, 1.3235, 1.3257
Sup: 1.3161, 1.3144, 1.3115, 1.3096
