Cable surged above 1.2700 barrier (daily Tenkan-sen) in early Friday, driven higher by profit-taking and weaker dollar which came under pressure after US weekly jobless claims jumped above expectations on Thursday.
Sterling was in a bumpy ride during previous sessions on political uncertainty in the UK as well as conflicting comments from top BOE officials regarding possible change in the monetary policy this year.
Fresh strength emerged after repeated failure to close below pivotal 1.2625 support (Fibo 61.8% of 1.2365/1.3047 ascend) and is looking for sustained break above 1.2700/11 (Tenkan-sen / 10SMA) to resume recovery rally.
The notion is supported by RSI / slow stochastic bullish divergence, formed on daily chart.
Recovery rally also needs sustained above 1.2728 (Fibo 38.2% of 1.2955/1.2588 downleg) for confirmation and extension higher for possible retest of key barriers at 1.2800/20 zone (20SMA / last week’s multiple upside rejections / daily Kijun-sen).
Broken Tenkan-sen and session low at 1.2700/1.2674 mark solid supports which are required to hold and keep fresh bulls in play.
Res: 1.2757, 1.2771, 1.2800, 1.2815
Sup: 1.2700, 1.2674, 1.2653, 1.2625
