‘Bulls would be eyeing for a follow through momentum beyond 1.3040-50 immediate hurdle, above which the pair is likely to aim towards reclaiming the 1.3100 handle and head towards testing 1.3125-30 resistance area, marking 38.2% Fibonacci retracement level of post-Brexit downslide.’ – Haresh Menghani (based on FX Street)
Pair’s outlook
On Friday, GBP/USD breached the upper Bollinger band and closed as high as the 1.3042 mark. The Pound opened lower today and has since demonstrated strong downside momentum, dashing through the weekly PP at 1.2985. The next support that the pair is gradually approaching to is formed by the 20-day SMA and the weekly S1 circa 1.2925. This level, however, might be considered unreachable in this trading session, setting 1.294 as the ultimate low. In case the Pound manages to reverse to the upside, the upper Bollinger band should limit the currency from trading higher. May’s speech at 18:00 GMT, however, may introduce some corrections in the pair’s movement.
Traders’ sentiment
Market sentiment remains bearish, as 51% of open positions are short. Meanwhile, 60% of pending orders are to buy the Pound.
