Cable opened with gap-lower on Monday and accelerated lower, extending steep fall into third straight day.
Sterling stays under increased pressure as dollar strengthens across the board on hawkish Fed and signs of rate hike in December, while uncertainty about Brexit rises.
Tensions within Theresa May’s government on fears that they will be unable to produce an orderly play for the exit from the EU, just five months before the deadline, and signals that some ministers may resign from the cabinet, add to negative pound’s environment.
Fresh bears took out strong Fibo support at 1.2878 (61.8% of 1.2695/1.3174 rally), generating fresh bearish signal for extension towards 1.2808 (Fibo 76.4%) and 1.2764 (01 Nov low).
Bearish momentum is building on daily chart and the price returned below a cluster of MA’s, increasing risk of retest of 30 Oct low at 1.2695.
Meanwhile, final push towards 1.2695 target could be delayed on consolidative corrective action as daily slow stochastic is breaking into oversold zone.
Broken Fibo 61.8% marks initial resistance at 1.2878, while stronger upticks should be capped at under converged 10/20SMA’s at 1.2958, which guard pivotal barrier at 1.2980 (daily cloud base).
Res: 1.2878, 1.2946, 1.2958, 1.2980
Sup: 1.2808, 1.2764, 1.2695, 1.2661
