Despite generally bearish indicators, the Sterling eventually gathered the necessary upside momentum to dash through the 55– and 100-hour SMAs and reach the weekly PP at 1.36 on Wednesday. In a longer perspective, the pair’s movement during the past two weeks has been stranded in a triangle-like formation.
In case its upper boundary, likewise reinforced by the 200-hour SMA and the weekly PP, is surpassed, a subsequent surge up to the breached senior channel at 1.37 is likely to follow.
In terms of today, the pair is expected to fluctuate in between all three SMAs prior to the UK Monetary Policy Summary today at 1100GMT. In the event of a negative surprise, the Sterling should target either the bottom triangle line or the weekly S1 at 1.3500 and 1.3417, respectively.
