GBP/USD Outlook: Upbeat Data And Brexit Hopes But Bulls May Face Strong Headwinds At Key 1.30 Resistance Zone

Technical analysis of Forex market

Cable rose on Monday, lifted by fresh risk sentiment on news that President Trump would leave the hospital as early as Monday and rising hopes that EU and UK might agree a trade deal.

UK PM Boris Johnson and European Commission President Ursula von der Leyen spoke over the weekend and agreed to extend talks.

Better than expected UK Services PMI (Sep 56.1 vs 55.1 f/c) added to positive signals.

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Fresh upside pressures last Thursday’s two-week recovery high (1.2978) underpinned by Friday’s bullish engulfing and focus on key 1.30 resistance zone (psychological/multiple upside rejection / falling 30DMA/Fibo 38.2% of 1.3482/1.2675 descend), break of which would accelerate recovery.

Caution on existing risk of recovery stall as 1.30 so far capped several attempts and bullish momentum is fading on daily chart, while stochastic is reversing after stalled on approach to overbought zone boundary.

Fresh dips are expected to offer better opportunity to re-join bullish market while the action remains above 10DMA (1.2833).

Res: 1.2978, 1.3000, 1.3038, 1.3078
Sup: 1.2900, 1.2865, 1.2833, 1.2772