Weaker than expected UK Manufacturing PMI (Jan 52.8 vs 53.5 f/c and 54.2 Dec) hurt sterling and sparked fresh weakness in early European trading on Friday, following strong upside rejection previous day. Bearish daily candle with long upper shadow on Thursday was initial signal of recovery attempt stall, with subsequent bearish acceleration pressuring again key support of 200SMA (1.3049) which repeatedly contained dips earlier last week. Evident loss of bullish momentum support scenario, with sustained break below 200SMA expected further dent existing positive sentiment and trigger fresh weakness towards 1.2950 (20SMA), 1.2905 (100SMA), with extension towards 1.2856 (daily cloud top) not ruled out on stronger bearish acceleration. Ability to hold above 200SMA which marks strong support and entry point for renewed longs, would keep overall picture positive and maintain hopes for fresh advance. US NFP data could help if disappointing results further hurt dollar.
Res: 1.3114, 1.3160, 1.3199, 1.3217
Sup: 1.3049, 1.3000, 1.2950, 1.2905
