Cable maintains a constructive outlook but will likely continue to encounter strong resistance at the key 1.3434 barrier

Cable edged higher early Monday, pressuring the pivotal 1.3350 barrier (the 61.8% Fibonacci retracement of the 1.3423–1.3232 pullback and the former recovery peak from April 24).

A series of higher lows since the 1.3232 correction low, along with fresh recovery gains tracked by a rising 10DMA, underpin a near-term bullish bias. A sustained break above 1.3350 is needed to confirm the end of the corrective phase and open the way for a fresh attack on the key 1.3434 barrier (the 2024 high).

However, sharply deteriorating confidence in the UK economy—now at historical lows—and signs of further economic weakness highlight risks that larger bulls could stall near 1.3434.

Meanwhile, growing optimism about easing concerns over US trade tariffs and initial signals of progress in Ukraine peace talks may strengthen the US dollar and shift sterling into a defensive stance.

This caution is supported by overbought weekly studies, fading bullish momentum, and last week’s strong upside rejection (seen in the weekly candle’s long upper shadow).

Additionally, daily momentum is overstretched and has turned sideways, with the RSI hovering near overbought territory, though overall daily studies remain bullish.

Expect a period of consolidation while the price action stays capped by 1.3423 (recent recovery peak) and supported at 1.3254 (the 23.6% Fibonacci retracement of the 1.2708–1.3423 upleg and the correction low).

A break below 1.3254/1.3200 would weaken the near-term structure and risk a deeper correction towards 1.3150 (38.2% Fibo retracement) and 1.3121 (20DMA).

Res: 1.3400; 1.3434; 1.3515; 1.3588
Sup: 1.3298; 1.3254; 1.3200; 1.3150