Ahead of the BOE event, we likely to trade between 1.3145-1.3050 with a neutral study. The next physiological support finds at 1.3000; breaking below there, exposes the downside risk to mid-July low 1.2950. It’s worth considering the downside risk heighten below 1.2950 to 1.2800 it’s 61.8% (2016 low-April 218 high).
As a reminder, the cable is facing potential resistance at the higher end of the descending pattern. This break indicates that the price has scope to resume a short-term rally to 1.3200-1.3220 initially. The confidence in the next leg higher will increase above 1.3220 with an extending target at 1.3290.
At higher time frame, the price has been holding 100MA (weekly) for six weeks. This week’s closing is very crucial to bulls; if lost the 100MA, then focus shift to the 61.8% fib reaction and even lower to the descending
GBP/crosses technical overview:
GBPCAD: 100MA (weekly) 1.6960, current trading level 1.7050
GBPCHF: Parallel support finds at 1.2950. Breaking below there exposes the downside risk to 1.2900 and 1.2860. The 100MA (weekly) finds at 1.2820.