Fresh rally on renewed Brexit optimism looks for bullish signal on break above daily cloud top
Strong bullish acceleration in late Asian / early European trading on Friday was sparked by fresh Brexit optimism, with sterling also being dragged by rising Euro.
Fresh bulls after three-day congestion eventually broke above Fibo barrier at 1.2370 (50% of 1.2783/1.1958, which repeatedly capped upside attempts in past few sessions) pressure daily cloud top (1.2403) and looking for significant bullish signal on weekly close above.
Bullish momentum is rising and north-heading 10/20/30DMA’s continue to track and support advance.
The pair is on track for the second consecutive bullish weekly close that adds to positive outlook.
Broken 55DMA (1.2304) now marks significant support and , expected to keep the downside protected.
The latest news that the EU would grant another Brexit extension to the UK in order to avoid possibility of exit without deal and softer tone from Northern Ireland’s largest political party over Ireland’s issue, contributed to improved sentiment.
However, Brexit remains pound’s key driver any fresh dissonant tones may limit recovery.
Res: 1.2403; 1.2468; 1.2501; 1.2514
Sup: 1.2384; 1.2349; 1.2304; 1.2275