Cable remains at the front foot and extends recovery on Friday morning, after fresh bulls registered break and close above the top of rising daily cloud.
Fading US recession fears and solid Chinese economic data revived risk sentiment while sterling gets support from diverging US/UK monetary policies (bets for the size of Fed rate cuts this year went well above expectations for BoE’s action) keeping pound underpinned.
Fresh gains cracked barriers at 1.2754/60 (Fibo 23.6% of 1.3044/1.2664 / falling daily Tenkan-sen), with daily close above these levels to boost developing bullish signals on formation of reversal pattern on daily chart.
Mixed daily studies lack clearer direction signal (negative momentum / mixed setup of MA’s / north-heading RSI).
Near term bias is expected to remain with bulls while the price stays above rising daily cloud, but extension through pivotal barriers at 1.2780 / 1.2810 (55DMA / Fibo 38.2%) is needed to confirm signal for recovery continuation.
Conversely, penetration of daily cloud (top lays at 1.2715) would weaken near-term structure and expose lower pivots at 1.2685/58 (converging 100/200DMA’s) loss of which will be bearish.
Res: 1.2739; 1.2760; 1.2780; 1.2815.
Sup: 1.2754; 1.2715; 1.2685; 1.2658.
