GBP/USD clings to gains above 1.39 handle, closer to post-Brexit highs
| • A broadly weaker USD supportive of the up-move.
• Brexit optimism provides an additional boost.
• Follow-through momentum needed to confirm bullish outlook.
As the NA trading session gets underway, the GBP/USD pair caught some fresh bids and inched back closer to Friday's fresh post-Brexit highs.
Currently placed around the 1.3920-30 region, the pair is now approaching its immediate strong hurdle near mid-1.3900s amid the prevailing bearish sentiment surrounding the US Dollar.
The greenback remained under some selling pressure at the start of a new week and was being weighed down by the US government shutdown, which was seen as one of the key factors behind the pair's goodish up-move of over 70-pips from session lows.
Apart from a broadly weaker USD, growing optimism that a Brexit transition period will be confirmed in the coming months continues to underpin the British Pound and remained supportive of the bid tone surrounding the major.
The up-move, however, lacked any fresh fundamental driver and hence, it remains to be seen if the momentum is strong enough to lift the pair beyond the mentioned barrier amid data-empty US economic docket.
Technical outlook
Valeria Bednarik, American Chief Analyst at FXStreet writes: “The 4 hours chart shows that the pair keeps bouncing from a bullish 20 SMA, but also that technical indicators have lost their upward strength and turned lower, with the Momentum now pressuring its mid-line and the RSI barely retreating within positive territory. The downward potential seems well limited, with the immediate support being 1.3830, where the pair bottomed last Friday.”
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