Cable – bearish momentum encounters resistance at the daily cloud top

Cable remains in a steep decline from last Wednesday’s 2½-month high at 1.3725, having already retraced more than 61.8% of the 1.3333/1.3725 rally and broken through the next key support at 1.3465, marked by the daily cloud top.

The pound was initially pressured by a stronger dollar after the Fed fell short of expectations for a highly dovish stance, while remarks from the BoE Governor suggesting possible further rate cuts added to downside momentum on Thursday. The move lower accelerated on Friday after UK borrowing data showed an unexpectedly sharp rise.

Technical signals on the daily chart have weakened, with the pair heading for a red weekly close. The potential formation of a bearish engulfing pattern along with a long upper shadow on the weekly candle further underlines negative sentiment.

Still, the daily cloud top provides notable support, which could slow the bearish momentum for now. Any limited rebounds are expected to remain capped below 1.3530, where the daily Kijun-sen and broken 50% retracement converge, offering better selling levels while keeping the bearish bias intact.

Res: 1.3500; 1.3530; 1.3559; 1.3575
Sup: 1.3465; 1.3426; 1.3397; 1.3333