Sterling comes under pressure on revived fears of no-deal Brexit
|Cable fell to intraday low in early US trading on Tuesday, following another failure at 1.33 barrier (spike to session high at 1.3310 was short-lived) as concerns about hard Brexit start to rise.
Unexpected dissonant tones came from France, on raising question about the reason the EU should grant Brexit talks extension.
Tensions rise as 21 Mar EU summit approaches and the third vote on PM May’s plan may end like two previous votes, as there are no substantial changes in the plan and stalled talks about Irish backstop additionally weigh, showing very little chances that the plan will be approved in MV3.
However, the possibility of extending the 29 Mar deadline exists, but requires PM May to do her homework and show progress in plan adjustment.
Technical studies show mixed signals, as bearish momentum is building on daily chart, but MA’s are still in bullish configuration and partially offset negative signal.
Pivotal supports, provided by converging 10/20SMA’s (1.3189/75) are so far intact, but break lower would weaken near-term structure and risk stronger bearish acceleration which would expose key 200SMA support (1.2985).
Conversely, sustained break above 1.33 barrier would ease existing downside risk, but extension through key barriers at 1.3381/86 (new 2019 high, posted on 13 Mar / 50% retracement of 1.4376/1.2397 fall) is needed to neutralize and shift focus higher.
Res: 1.3273; 1.3310; 1.3330; 1.3349
Sup: 1.3241; 1.3189; 1.3175; 1.3120
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