Cable holds firm bullish tone in early Friday’s trading and attempts to extend Thursday’s nearly 1.8% advance (the biggest one-day rally in 2018), as pound soared on fresh optimism about Brexit deal.
Fresh weakness of the dollar on signals of easing trade tensions between the US and China, added to positive sentiment.
Penetration and close in the daily cloud on Thursday was bullish signal, reinforced by denting a cluster of daily MA’s (55/20/30) at 1.3000/25 zone, with today’s fresh attempts to extend rally, resulting in testing pivotal barrier at 1.3043 (Fibo 61.8% of 1.3257/1.2695 fall, reinforced by 10SMA).
Improved daily techs favor further advance as story about Brexit, pair’s key driver, turned to positive mode and continues to support.
Close above 1.3043 pivot would provide further positive signal for extension above daily cloud top (1.3095), which would open way for possible full reversal of 1.3257/1.2695 fall.
US jobs data are the key event today and could spark stronger market action.
Forecast for NFP is positive (193K f/c for Oct vs 134K in Sep) but could be offset if earnings come in line with forecast (0.2% F/c Oct vs 0.3% Sep) or fall below consensus.
Generally, strong US labor data would offer fresh boost to the greenback and sterling could return to 1.29 zone in such scenario.
Conversely, overall weak data would increase existing pressure on dollar and lift British pound.
Res: 1.3043, 1.3095, 1.3125, 1.3192
Sup: 1.3000, 1.2976, 1.2921, 1.2910
