GBPUSD – renewed probe above 1.40; weaker dollar and positive environment around Brexit talks support pound
Cable broke above 1.40 barrier in American trading on Tuesday, following brief probe in Asian session (1.4002 high) and subsequent pullback which found footstep at 1.3915, where dip was contained by hourly 55SMA. Fresh bullish acceleration threatens for firm break above 1.40 handle, as US dollar weaken further and overall environment around Brexit talks is positive and suggesting smooth continuation of divorce negotiations, which further supports sterling. Today’s rally hit the highest level since June 23 2016 Brexit decision, with close above 1.40 seen as strong bullish signal for extension of recovery leg from 1.1930 (post-Brexit vote low) towards projected target at 1.4123 (FE 161.8% of wave C from 1.3301 (25 Dec trough). Broken 1.40 barrier now turned to initial support, followed by today’s spike low at 1.3915, which marks significant support.