Cable hit new 37-year low on Wednesday after an announcement from Russia and tough rhetoric threatened of further escalation and send a shockwaves through the markets.
Fresh exodus into safety lifted dollar and added to pound’s existing bearish stance, with strong bearish signal generating on break through pandemic low (1.1410), though confirmation still needs weekly close below this level, while monthly close below will reinforce the signal.
Technical studies are bearish on daily and weekly chart but oversold on both timeframes, suggesting that bears may face headwinds.
Wide expectations for Fed’s 0.75% hike would add pressure to pound, while markets look for more details about the central bank’s next steps, regarding the size and pace of further rate hikes that would strongly influence the sentiment.
Fibonacci projections at 1.1278 and 1.1200 mark next targets which guard psychological 1.1000 level.
Former lows at 1.1405 (Sep 7 and 1.1410 (Mar 2020) reverted to immediate resistance, with falling 10DMA (1.1483) expected to cap and keep bears intact.
Res: 1.1410; 1.1460; 1.1483; 1.1532.
Sup: 1.1304; 1.1278; 1.1200; 1.1150.
