GBPUSD looks for signal to break out of tight range between daily MA’s and cloud top
Cable holds within tight range on Monday, capped by descending cloud top (1.3961) but near-term action is supported by converged daily MA’s (10/20/30) at 1.3900 zone and forming bull-crosses.
Rising 55SMA (1.3888) continues to underpin after containing Friday’s dips and is reinforced by broken bear-trendline off1.4345 peak.
Bullish setup of daily MA’s and fresh bullish momentum building, support the action for final break through pivotal 1.40 resistance zone, after several rejections last week, to signal continuation of recovery leg from 1.3711 (01 Mar low).
Close above daily cloud, following four consecutive rejections, will be strong bullish signal for extension towards 1.4070 (26 Feb high) and 1.4102 (Fibo 61.8% of 1.4345/1.3711 descend).
Bearish scenario requires close below 55SMA to signal top and spark fresh weakness.
Key releases for sterling this week (inflation on Tuesday and labor data on Wednesday) along with FOMC rate decision , are expected to generate fresh direction signals.
Res: 1.3961; 1.4000; 1.4028; 1.4070
Sup: 1.3900; 1.3888; 1.3853; 1.3820