Cable extends weakness into second straight day, initially deflated by stronger dollar on unexpectedly hot US inflation on Tuesday, while today’s softer than expected UK CPI data raised bets for BoE rate cut by June and added pressure on sterling.
Wednesday’s drop broke below 200DMA (1.2562) and pressured pivotal Fibo support at 1.2525 (38.2% of 1.2037/1.2827 rally / Feb 5/6 lows).
Daily close below 200DMA is seen as a minimum requirement to keep fresh bears in play, while firm break of 1.2525 would generate reversal signal and open way towards next key supports at 1.2458/32 (daily cloud base / 50% retracement).
Falling 10DMA (1.2615) marks initial resistance, guarding upper pivots at1.2650 zone (converged daily Tenkan/Kijun-sen) and 1.2690 (daily cloud top).
Res: 1.2615; 1.2650; 1.2670; 1.2690.
Sup: 1.2525; 1.2500; 1.2488; 1.2432.
