GBPUSD – no Brexit deal disappoints bulls but hopes of fresh upside are still in play
Cable was on roller-coaster in Monday’s afternoon trading, initially regaining traction and bouncing near last Thu/Fri highs (1.3549), boosted by upbeat UK Construction PMI data and increasing Brexit optimism, and fell sharply to new session low at 1.3412 after today’s meeting between UK PM May and EU Commission head Juncker on Brexit ended without agreement.
Sterling managed to cover part of losses posted on Friday / earlier today, but kept bullish outlook on underlying bullish bias which supports buying dips scenario.
Bullish techs continue to underpin, however, hesitation on approach to 1.3549 barriers cannot be ruled out on overbought conditions.
Near-term sentiment remains positive for now, despite negative results of today’s meeting between top UK/EU officials, however, downside risk is expected to remain in play while 1.3549 barriers stay intact.
Extended profit-taking after disappointing outcome of today’s meeting could trigger deeper pullback.
Scenario needs extension through rising 10SMA (1.3370) to generate stronger bearish signal.
Conversely, sustained break above 1.3549 is needed to improve the sentiment and expose key barrier at 1.3655 (20Sep recovery peak).
Res: 1.3500; 1.3549; 1.3570; 1.3600
Sup: 1.3412; 1.3370; 1.3353; 1.3290