Cable accelerated higher in European trading on Monday, signaling an extension of recovery leg from 1.3670 double-bottom (Mar 24/25).
Sterling maintains positive tone on rising expectations for stronger growth as economy reopens, in contrast with worsened situation in the EU, as surging number of new infections and lockdowns across the continent keep the single currency under pressure.
The pair continues to rise within ascending thick daily cloud and hit two-week high, focusing pivotal barrier at 1.3887 (Fibo 38.2% of 1.4238/1.3670 / 30 DMA).
Firm break here is needed to generate bullish signal for extension towards key obstacles at 1.3968 (daily cloud top) and 1.4000 (psychological).
Rising 14-d momentum on daily chart is about to break into positive territory and further support the action, however, recovery may lose traction on failure to break through 1.3887 pivot, with return and close below 1.3800 handle to weaken near-term structure.
Res: 1.3868; 1.3887; 1.3954; 1.3967.
Sup: 1.3846; 1.3812; 1.3804; 1.3774.
