Cable hit new 7-week low (1.3670) in early European trading on Thursday, but the action is holding within narrow range and signaling consolidation after strong fall in past two days.
Wednesday’s penetration and close within rising daily cloud generated bearish signal, but bears may take a breather before attacking pivotal Fibo support at 1.3641 (38.2% of 1.2675/1.4238 upleg), as stochastic is in deep oversold territory on daily chart and 14-d momentum turned north.
Sterling remains under pressure on growing coronavirus third wave across the Europe and concerns that sharpened EU vaccine export rules may impact UK and potential upticks are expected to offer better opportunities to re-enter strong bearish market.
Daily cloud top (1.3792) and 55DMA (1.3807) should ideally keep the upside protected.
Violation of 1.3641 Fibo support would expose rising 100DMA (1.3610) and more significant daily cloud base (1.3560).
Res: 1.3708; 1.3756; 1.3792; 1.3807.
Sup: 1.3670; 1.3641; 1.3610; 1.3560.