Cable holds in red in early European trading on Wednesday, accelerating lower after upside attempts were rejected under Tuesday’s new recovery high and capped by 20SMA (1.3911).
Fresh risk aversion on Trump advisor Cohn’s resignation dragged sterling lower after for straight bullish days.
Near-term action is holding between 20SMA (0.3911) and rising 55SMA (1.3813), with fresh direction signal to be generated on break of either side.
Sideways-moving 20SMA which repeatedly capped recovery marks pivotal resistance, while ascending 55SMA underpinned bullish acceleration in past two days and marks lower trigger.
Lift above 20SMA is needed to open way for final push towards next key barriers at 1.3932 (Fibo 61.8% of 1.4070/1.3711) and 1.3960 (daily cloud top), break of which would generate stronger bullish signal.
Conversely, loss of 55SMA would signal an end of corrective phase from 1.3711 and shift near-term bias lower.
Mixed setup of daily MA’s and firmly negative momentum studies provide no clear direction signals, which could be provided on break through initial pivots.
Res: 1.3911, 1.3932, 1.3960, 1.3996
Sup: 1.3845, 1.3813, 1.3766, 1.3740
