Cable stayed within 30-pips range in Asia and below fresh recovery high at 1.2709, following strong rally on Wednesday, sparked by hawkish comments from BoE’s Haldane.
Failure to clearly break above 1.2700 pivot (50% of 1.2814/1.2588 downleg, reinforced by daily Tenkan-sen in steep fall and descending 10SMA), keeps risk at the downside, as daily studies are in bearish setup.
The pair may extend consolidation after repeated failure to close below cracked 100SMA, but limited upside is seen for now, as multiple bear-crosses of daily MA’s maintain bearish pressure.
Lower pivots lay at 1.2631 (100SMA) and 1.2600 (correction low), loss of which would open way towards targets at 1.2578/50 (daily cloud base/200SMA).
Conversely, lift above 1.2700 pivot would expose key near-term barriers at 1.2800/20 zone (daily cloud top/recent multiple upside rejection).
Sterling will be closely watching the outcome of Queen’s speech vote in the parliament for stronger signals. The vote will be basically vote of confidence in PM Theresa May and her government and approval of Queen’s speech is expected to boost pound. Conversely, Sterling may come under strong pressure if Queen’s speech will not be approved.
Res: 1.2686, 1.2700, 1.2728, 1.2757
Sup: 1.2656, 1.2631, 1.2600, 1.2578
