Tuesday finally saw a clear rejection from the trend line following through on the long daily wicks for Friday and Monday. It appears traders may be getting out of longs prior to the Bank of England’s Policy Meeting at 1130GMT. Note that we risk the BoE signalling its readiness for cutting rates soon as inflation pressures ease and the manufacturing sector is in urgent need of some cheap funding.
Resistance
- 1.25943/6026 – Monday High / 50D Moving Average
- 1.25521 – Bearish Trend Line
- 1.25042 – Intraday Consolidation Floor
Support
- 1.24717 – Intraday Range Low
- 1.24489 – Intraday Range Low
- 1.24215 – Intraday Consolidation Floor
Given Tuesday’s solid drop our bias will be to look for a follow through to the move at the very least a test of 1.24717. Our preferred entry will still be looking for long wicks from the resistances though failing that an intraday close below 1.24717. With prices already well inside the prior weeks consolidation zone we would prefer hearing of some new catalyst to commit to holding on to any sell. A consolidation around 1.24717 in hourly charts and long tails could actually be seen as entry points for a test of the consolidation highs.
