GBP/USD touches a high of 1.2776 on the session
And price is now moving towards a test of the resistance seen from Friday’s low @ 1.2777. That will be the next level to look out for before a test of the 100-hour MA (red line) @ 1.2793 is seen. The dollar is slightly weaker across the board as well but the move higher here is also the result of pound strength as the quid moves to session highs against the likes of the euro and yen as well.
The bounce in cable comes after a test of the 1.2700 handle but as mentioned earlier, unless price breaks above the 100-hour MA and the trendline resistance, bias still favours sellers as the same fundamentals still apply.
Today’s move higher is more of a squeeze in my view but that doesn’t take away from the fact that buyers are starting to find a base as most of the negativity has already been priced in. If that is the case, it means that sellers will need fresh pessimism surrounding a Brexit deal and/or UK politics to drive a move lower in the pound for the time being.
Should price start to move above the trendline resistance, expect the squeeze here to turn much sharper. That will be the key level to look out for in the session ahead.