GBPUSD – bullish n/t bias ahead of PM May’s speech
Cable is consolidating under 1.3600 where Thursday’s recovery rally faced strong headwinds. Bounce from the floor of four-day congestion at 1.3460 zone sidelined immediate downside risk, but renewed bearish pressure could be anticipated if 1.3600 zone resists attacks.
Bearish signals from overbought daily RSI and slow stochastic reversal from overbought territory continue to warn, but clearer direction signals could be expected on sustained break out of near-term congestion between 1.3451 and 1.3655.
Today’s focus is on UK PM May’s speech in Italy, as May will try to rescue stalled Brexit talks if she convinces the EU that she is ready to cut a fair divorce deal.
May’s speech is expected to have a strong impact on pound, as expectations of positive outcome already strongly boosted UK currency on Thursday.
Cable may receive fresh boost on euphoric reaction on May’s speech and could accelerate towards next target at 1.3837 (Fibo 61.8% of 1.5016/1.1930 fall) on sustained break above recent peaks at 1.3618/55.
Theresa May’s speech in Italian city of Florence is due at 13:15 GMT.
Res: 1.3595; 1.3618; 1.3655; 1.3700
Sup: 1.3553; 1.3535; 1.3523; 1.3470