Cable bounced to 1.2250 zone on Wednesday and reversed Tuesday’s losses that hit fresh multi-week low at 1.2107. Again, dips were short-lived and another failure to close below 1.2155 (Fibo 76.4%) pivot, signals strong hesitation of larger bears. However, overall picture is bearish and favors further downside, with eventual firm break below 1.2155 seen as a trigger. Meantime, today’s recovery rally that improved near-term studies and probed above initial barrier at 1.2206 (falling 10SMA) signals extended consolidation. Close above 10SMA would give initial signal of basing and possible stronger correction of steep fall from 1.2538 to 1.2107. Firm break above next pivot at 1.2300 is needed to confirm scenario. UK jobs data are in immediate focus, ahead of FOMC, which is expected to give clearer direction signals.
Res: 1.2254, 1.2283, 1.2300, 1.2345
Sup: 1.2206, 1.2177, 1.2153, 1.2107
