Cable remains in red in early Friday following Thursday’s bearish close after larger bulls lost traction on approach to 200DMA (1.3848).
Return below broken 100DMA (1.3798) and Fibo 76.4% barrier (1.3794) adds to initial signal of stall and shift near-term focus lower.
Weaker than expected UK retail sales data (Sep 0.2% vs 0.5% f/c m/m, -1.3% vs -0.4% f/c y/y) increased pressure on pound, warning of corrective pullback after the pair hit new one-month high (1.3834) earlier this week.
Rapid loss of bullish momentum on daily chart and stochastic reversing from overbought territory support scenario, but rising thick weekly cloud continues to underpin the action, with cloud top (1.3694) offering solid support.
Weekly close will the key, with penetration into cloud to further weaken near-term structure, while close above the cloud would signal that bulls remain in play and on track for renewed for renewed attack at 200DMA after shallow consolidation.
Res: 1.3798, 1.3834, 1.3848, 1.3891.
Sup: 1.3742, 1.3721, 1.3694, 1.3675.
