Cable extended its withdrawal from 1.32 peaks Tuesday, losing more than 200 points, or 1.60%. Persistent jitters over the prospect of a hard Brexit, and a recovery in the US dollar index, saw a number of key technical supports give way on the H4 scale, including the widely watched 1.30. As evident from the chart, 1.29 recently made its debut as support, reinforced by a 61.8% Fibonacci retracement ratio at 1.2908.
A breach of 1.29 today displays limited support on the H4 timeframe until greeting 1.28, shadowed closely by March’s opening level at 1.2783. Note we also broke through the relative strength index (RSI) 50.00 value. Potentially halting downside south of 1.29, though, is daily Quasimodo support at 1.2849; however, with weekly price nudging below long-standing trend line resistance, pencilled in from the high 1.5930, lower levels may still be favoured. Beneath the aforementioned daily Quasimodo support we can see room to approach support at 1.2769, a 127.2% Fibonacci extension point at 1.2738 and the 200-day SMA (orange – 1.2703), therefore signalling the possibility of moves below 1.28.
Buying off 1.29 is likely brief, despite boasting additional support from the 61.8% Fibonacci retracement. As such. A H4 close below 1.29 is likely to entice sellers. Whether traders enter on the breakout candle or a retest at the latter, the initial take-profit target is set at 1.2849.
Disclaimer: The information contained in this material is intended for general advice only.