Cable is consolidating under a new two-week high (1.3904), posted after Friday’s 0.9% rally, as sterling accelerated higher on fresh risk mode, inspired by global equity gains.
Pound’s sentiment improves on expectations that the government would remove nearly all coronavirus restrictions on July 19, while weaker dollar adds to a positive near-term outlook.
Fresh bulls need to clear important barriers at 1.3929/59 (Fibo 38.2% of 1.4249/1.3731 fall/daily cloud base) to generate a stronger reversal signal, which would require a break of the key 1.40 resistance zone for confirmation.
Dips need to hold above broken 10DMA (1.3823) to keep bulls in play, but weakening momentum on the daily chart warns that the downside is still vulnerable.
Caution on the loss of 10DMA that would signal an end of recovery and bring bears back to play.
Res: 1.3910, 1.3929, 1.3959, 1.3990.
Sup: 1.3834, 1.3823, 1.3794, 1.3755.
