Cable is holding within narrow consolidation in early Wednesday’s trading, after hitting new, marginally lower low at 1.3580 (the lowest since 12 Jan).
Sterling was down over 1% on strong bearish acceleration on Tuesday, which eventually broke and closed below pivotal support at 1.3711 (01 Mar trough) and generated strong bearish signal on completion of double-top pattern (1.4344/76), which could result in further significant losses.
Strong negative sentiment following recent negative releases of key UK data which reduced hopes of BoE rate hike this month and stronger US dollar, continue to move pound lower. Firmly bearish tech (10/100SMA bears cross formed today and momentum remaining in steep descend, deeply in the negative territory) add to bearish pressure. Bears may take a breather on oversold conditions and could accelerate if UM Construction PMI comes in line/above forecast (Apr 50.5% f/c vs 47.0 prev), but strong bearish structure suggests limited recovery before bears resume.
Strong supports at 1.3550 (Fibo 61.8% of 1.3038/1.4376) and 1.3530 (rising 200SMA) are in focus and break here would generate fresh bearish signal.
Res: 1.3650, 1.3711, 1.3772, 1.3792
Sup: 1.3580, 1.3550, 1.3530, 1.3500
