Pound benefits from weaker dollar but break above 1.2700 zone is needed to confirm

Sterling enters US session at the front foot after hitting one-week high at 1.2705 earlier, with initial positive signals being generated on break above 10SMA (1.2643) and last Thursday’s recovery high at 1.2686.
Weaker dollar on expectations of Fed’s dovish hike tomorrow keeps pound underpinned, but bulls need to sustain break above 1.2700 (Fibo 61.8% of 1.2839/1.2476) and 20SMA (1.2714) to confirm full retracement of post-parliamentary Brexit vote cancellation fall and signal further recovery.
Close above 10SMA would generate initial positive signal, but weakening momentum on daily chart could upset bulls.
Conversely, failure to close above 10SMA would weaken near-term tone and keep the downside vulnerable.

Res: 1.2700; 1.2713; 1.2782; 1.2810
Sup: 1.2643; 1.2609; 1.2564; 1.2528