The 55-hour SMA has managed to restrict the Pound from appreciation for the fifth consecutive session. This line was re-tested early on Wednesday, followed by a plunge down to the weekly S2 at 1.2854.
It is apparent that the pair has fallen down to the bottom boundary of three different-scale channels. This allows to think that some appreciation might be under way. In addition, technical indicators still remain in the strongly oversold territory. A surge is expected only if the 55-hour SMA and the monthly and weekly S1s are breached at 1.2930. This move should trigger bulls for a short-term surge up to the monthly PP at 1.3050, at least.
On the other hand, it does not seem that the rate could sustain the current decline any longer. The psychological 1.28 level is unlikely to be breached to the downside.
