GBPUSD Outlook: Cable Surges after EU/UK Deal Announcement, but Rally Needs Confirmation on Close Above 20SMA

Technical analysis of Forex market

Cable jumped around 130 pips on Thursday on news that EU and UK Brexit negotiators reached an agreement on draft text of post-Brexit ties between the European Union and United Kingdom.

Eventual deal after Brexit talks repeatedly stalled, provides temporary relief, however, today’s rally that initially broke above pivotal barriers provided by 10SMA (1.2866); Fibo 38.2% of 1.3174/1.2722 (1.2895) and 20SMA (1.2903) needs confirmation on daily close above, which would signal further recovery.

Stronger bullish acceleration on close above 20SMA could be also attracted by twist of daily cloud (1.30) next week.

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Momentum studies are turning up on daily chart and support recovery, as the sentiment improves on positive news.

Bearish scenario, on the other side, sees downside risk remaining if recovery rally stalls and today’s action closes below 10SMA.

Res: 1.2866; 1.2895; 1.2903; 1.2948
Sup: 1.2823; 1.2764; 1.2722; 1.2695