The Sterling managed to advance 85 pips against the US Dollar during the first past on Monday. Further upside momentum was disrupted by the combined resistance of the weekly and monthly PPs circa 1.3860.
The inability of bears to take advantage of this situation resulted in a slight period of consolidation between 1.3860 and 1.3830. Given that the northern barrier is likewise guarded by the 200-hour SMA, bulls are unlikely to gather enough momentum for a breakout. Thus, that the pair could edge lower during the following hours until the 55– and 100-hour SMAs limit a further decline below 1.38.
Meanwhile, the medium-term pattern suggests that the Sterling is likely to appreciate this week; thus, the 1.3860 should eventually be breached to allow for a surge up to 1.3950.
