A retracement from the breached one-month channel was followed by a surge up to the 1.3865 mark. Bulls were reluctant to continue this advance even further due to the strong resistance of the 55– and 100-hour SMAs and the monthly and weekly pivot points.
Technical indicators suggest that bears could take advantage of this situation and thus force the rate lower today. This movement, however, could be very limited, as the 200-hour SMA is located nearby. In case this line is breached, the next downside target is the 1.38 mark.
By and large, the general tendency of the Pound, which is expected to prevail in the market this week as well, is upwards. Thus, traders are likely to see appreciation towards a trend-line or the weekly R1 at 1.3910 and 1.3940, respectively, during the first part of the week.
