Cable snapped the three-week winning streak by ending the last week at 1.4134 levels. Hawkish talk from Fed officials combined with heightened Brexit fears made sure the currency fell from Monday through Wednesday to a low of 1.4057, before a bout of profit taking on Thursday helped it move back above 1.41 where it stayed comatose on Friday amid holiday thinned trade. Major UK markets remain closed today on account of Easter Monday, hence volumes are likely to remain low.
Technicals – Strong resistance at 1.4154-1.4164
Sterling’s failure to sustain above confluence of key Fibo – 1.4154 (38.2% of 1.4669-1.3835) – 1.4165 (1.5230-1.3835) if followed by a break below 1.4146 (5-DMA) would open doors for a drop to 1.41-1.4079 (Jan 21 low).
A violation at 1.4079 would expose 1.4032 (23.6% of 1.5230-1.3835).
Daily RSI stays below 50.00 and thus indicates the upticks towards rising trend line hurdle at 1.4197 could be met with fresh offers.
Bearish invalidation is seen only in case of a daily close above 1.4197 (rising trend line hurdle).
EUR/USD Analysis: Could attack 1.12 amid thin volumes
Euro’s repeated failure to sustain below 1.1150 levels coupled with a bullish daily and hourly RSI indicates the spot could be cut through 1.1173 (23.6% of 1.0517-1.1376) and tests rising trend line hurdle (drawn from Mar 15 low-Apr 15 low and extended) at 1.1205 – 1.1214 (hourly 200-MA).
Daily close above 1.1205 would mean the post-ECB bullish momentum stays intact, opening doors for a re-test of 1.1257 – 1.13 levels ahead.
On the lower side, a break below 1.1125 (rising trend line support) – 1.1115 (50% of 1.1714-1.0517) would open doors for a possible cut through 1.1088 (50% of Mar-Aug rally) and test of 200-DMA support at 1.1041.
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