Sterling recovered after failing for a second session to break the 76.4% Fibo of the 1.2075-1.2812 May-June rise at 1.2249, following a bounce in stocks on rebounding in U.S. consumer confidence nL1N2E7157, but bulls still face a heavy burden of proof.
Bulls must regain last week's 1.2541 high near the 21-day moving average, now at 1.2527, to help their cause.
At this week's 1.2252/58 lows, sterling found support near the lower 21-day Bolli band and the top of the 1.2031-289 daily cloud, failing to close below either on Monday.
Sterling could revert to the 21-DMA if it clears the top of the descending channel -- at 1.2405 Wednesday -- that it has occupied since June's high.
As a broader indication of pound strength, bulls will be watching to see if EUR/GBP's Monday rally toward the 61.8% Fibo of the March-April slide can be negated with a close below the 50% Fibo and cloud top at 0.9085.
Today's comments from Prime Minister Boris Johnson nL8N2E71P5 and Bank of England Deputy Governor Jon Cunliffe regarding negative rates nL9N2CP02I didn't bring anything new to the market.
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