The Pound was driven by strong upside momentum against the Greenback on Monday, thus closing the session with a 94-pip gain. As a result, the pair breached the combined support of the weekly R1 and the upper boundary of a three-month ascending channel near 1.3960.
Shorter-term patterns, however, demonstrate that the strong movement north apparent during the previous week is starting to allay. Thus, the Sterling moving above the 1.3960 level might actually be a false breakout.
Technical indicators suggest that the pair could trade lower within the following days. This session, however, might still mark a slight up-move towards the weekly R2 at 1.4061.
Subsequently, the rate is expected to edge lower towards the 55– and 100-hour SMAs circa 1.39.
