Pound extends recovery on fresh hopes of soft Brexit

Cable extends recovery close to 1.32 barrier on Wednesday, driven by renewed hopes from PM May’s attempts to break Brexit deadlock.
May will meet opposition leader Corbyn today in attempts to reach agreement between two parties that would result in eventual agreement on divorce deal and avoid disastrous no-deal scenario.
Renewed optimism helped pound skip stronger negative reaction on downbeat UK Services PMI (Mar 48.9 vs 51 f/c) as the sector was hit by Brexit uncertainty and fell below 50 threshold for the first time since mid-2016.
Today’s extension broke through 10SMA and converged 20/30SMA’s and generated another bullish signal on marking over 50% retracement of 1.3381/1.2977 pullback.
The recovery action tracked and supported by rising and thickening daily cloud and also supported by rising momentum.
Bulls need close above 1.3200 handle (high of last Thu before strong fall) to signal further advance towards 1.3269 (27 Mar lower top).
Pound could rally further and possibly retest recent high at 1.3381 in case May reaches agreement with the opposition, while failure in talks would weaken the structure and risk fresh attempt towards strong 1.30 support zone.

Res: 1.3200; 1.3226; 1.3269; 1.3310
Sup: 1.3167; 1.3136; 1.3097; 1.3064