The sterling inched higher as traders took profit after the BOE’s dovish shift last week. The rally above the supply area of 0.8570 is a sign of commitment from the buy-side.
Strong momentum has forced the bears to rush for the exit door. 0.8620 is now the next resistance. Its break would bring the euro to September’s high at 0.8660, where a breakout may lead to a bullish reversal in the medium-term.
In the meantime, an overbought RSI is causing a pullback. The base of the latest surge at 0.8465 is an important support.
