Cable keeps positive tone and continues to pressure key barriers at 1.2300 zone (former top of Aug 1 / 50% retracement of larger 1.4249/1.0348 downtrend), where bulls face strong headwinds for the third consecutive week.
Sustained break through 1.2300 zone barriers and new multi-month high at 1.2344 (Dec 5) would signal continuation of the uptrend from 1.0348 (2022 low, posted on Sep 26) and expose targets at 1.2452 (55WMA) and 1.2666 (May 22 high).
Bullish daily studies support the action but conflict with negative signals on weekly chart (overbought conditions / fading bullish momentum) in addition to last week’s Doji candle which warns that larger bulls might be running of steam.
Rising 10DMA, which tracks the action for one month, offers initial support at 1.2214), with converging 200 and 20DMA’s (1.2111/1.2084 respectively) on track to form bull-cross, expected to contain and keep larger bulls intact.
Traders focus on key events this week, US inflation (today); UK inflation / Fed rate decision (Wednesday); BoE and ECB rate decision (Thursday) which are expected to provide stronger direction signals.
Res: 1.2344; 1.2392; 1.2452; 1.2520.
Sup: 1.2214; 1.2154; 1.2111; 1.2084.
