The Pound remained relatively stable against the US Dollar yesterday. The pair edged lower during the first part of the day; however, the strong support of the bottom channel line and the 55-hour SMA circa 1.3930 stopped any attempts to edge lower. Subsequently, bulls took the upper hand and sent the Pound for a test of the most junior channel near 1.4035. Meanwhile, converging technical indicators suggest that the bullish sentiment might be exhausted, thus allowing for a correction south within the following trading hours. This scenario would return the rate back in the senior channel towards the weekly R1 and the 55– and 100-hour SMAs near 1.9350. In case the weekly R2 is breached, this high level is not expected to hold for long, as the Sterling should eventually be forced lower.
