Cable holds bid in early Thursday’s trading and offsetting so far the risk of reversal, following Wednesday’s Doji with long upper shadow, which was formed after strong upside rejection of four-day rally at 1.4222 (20-d upper Bollinger band).
Overall bullish structure could be dented by overbought slow stochastic and loss of momentum, with bearish close today needed to generate initial bearish signal on formation of Doji reversal pattern.
Stronger bearish signal could be expected on break below 1.4124 (Fibo 38.2% of 1.3965/1.4222 recovery leg) and confirmation of reversal on close below 1.4094 (converged rising 10/20SMA’s).
Bullish scenario, on the other side, needs close above 1.4200 to expose pivotal barrier at 1.4244 (26/27 Mar double-top), break of which would open way towards key barrier at 1.4345 (25 Jan top / the highest since Brexit vote in June 2016).
However, such scenario would require stronger catalyst, such as progress of Brexit negotiations or significant fall of the greenback.
Res: 1.4200, 1.4222, 1.4244, 1.4277
Sup: 1.4170, 1.4124, 1.4094, 1.4063
