GBPUSD – choppy trading after Wed’s strong upside rejection; bulls keep 1.4000 barrier in focus
Cable maintains firm tone on Thursday despite strong upside rejection after spike to 1.3942 high (the highest since Brexit vote) previous day.
Choppy trading was caused by increased volatility on political uncertainty over Brexit divorce process.
Bullish techs favor further upside, with bulls eyeing psychological 1.4000 barrier.
Close above 1.3837 (cracked Fibo 61.8% of 1.5016/1.1930 fall) is required to confirm continuation of bull-leg from 1.3457 (11 Jan trough) and open way for eventual test of 1.4000 barrier.
The pair is riding on the third wave of five-wave cycle from 1.3038 (03 Nov higher base) with 1.4000 barrier marking its FE 138.2%.
Sustained break here would open way for extension towards 1.4123 (FE 161.8%).
Meanwhile, extended corrective dips could be anticipated, as daily techs are overbought and Wednesday’s strong upside rejection weighs.
Rising 10SMA (1.3670) should contain extended downticks.
Res: 1.3847; 1.3900; 1.3942; 1.4000
Sup: 1.3804; 1.3756; 1.3741; 1.3700