Near-term bullish bias remains well intact
Barnier's comments overnight were enough to provide the right kind of squeeze higher for the pound and cable popped above 1.3000 on the back of that. Price even comfortably held a daily close above the figure level and that is helping to provide the right kind of platform for a move higher still in the pair.
At the moment, there is some minor resistance from the 3 August high @ 1.3043 but as long as price holds above 1.3000 then the momentum is still very much with buyers right now. Any threat of a break of the near-term bias looks far away with the 100 and 200-hour MAs sitting at 1.2898 and 1.2872 respectively.
If anything, the 200-bar MA (blue line) on the 4-hourly chart @ 1.2952 will be the first key test for buyers should the upside momentum start to wane. But for now, it is all about staying above the 1.3000 handle.
The morning star pattern on the weekly chart looks to have played out well so far. That's one in the win column for technical traders as the week began. But again, it needed help from the key fundamental driver behind the pound currently - Brexit.
The 100-week MA (red line) comes in at 1.3071 and that will also provide a key resistance level for the pair ahead of the weekly close tomorrow. For now though, buyers look comfortable and as long as price holds above 1.3000, then the move higher could have a bit more to run.
Support
- 1.3000 (bids, 61.8 retracement level)
- 1.2975 (swing region)
- 1.2952 (200-bar MA on H4)
- 1.2930-38 (swing region, 50.0 retracement level)
- 1.2900 (minor swing region, 100-hour MA)
- 1.2872 (200-hour MA)
Resistance
- 1.3043 (3 August high)
- 1.3071-83 (100-week MA, 76.4 retracement level)
- 1.3100 (offers, swing region)
- 1.3140-50 (swing region)
- 1.3173 (31 July high)
- 1.3200-10 (offers, swing region)
