GBP/USD outlook: Cable was the top winner in early Monday's trading

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable extends Friday’s strong rally (up 0.73% for the day) and establishing above psychological 1.40 level which capped the action since late February.

Early Monday’s advance hit 10-week high and focusing pivotal barrier at 1.4103 (Fibo 76.4% of 1.4238/1.3669 descend), after surge through 1.40 zone and break of 1.4020 (Fibo 61.8%).

Friday’s long bullish daily candle after three-day congestion and close well above thickening daily cloud signaled bullish continuation, while revived positive momentum and daily moving averages in full bullish setup underpin the action.

Sterling was lifted on Friday after disappointing US NFP data tempered expectations for Fed rate hike in the near future and deflated dollar, with fresh acceleration on Monday sparked by Scottish National Party’s failure to win majority in the parliament and UK PM Johnson ruling out another Scotland’s secession vote.

In addition, successful vaccination and decision to further ease COVID restrictions from the next week, adds to pound’s bullish sentiment.

Broken barriers at 1.4020/00 zone reverted to solid supports which are expected to hold and keep fresh bulls intact, with today’s close above these levels to add to bullish signals.

Extended dips should find ground above 1.3953 (broken Fibo 50% of 1.4238/1.3669) while drop below daily Tenkan-sen (1.3935) and violation of daily cloud top (1.3902) would sideline bulls.

Res: 1.4071; 1.4103; 1.4137; 1.4181.
Sup: 1.4020; 1.4000; 1.3953; 1.3935.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.4145
2. R2 1.4075
3. R1 1.4029
PP 1.3959
1. S1 1.3912
2. S2 1.3843
3. S3 1.3796

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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