GBP/USD Outlook: Bulls Look for Firm Break of Psychological 1.40 Barrier

Technical analysis of Forex market

Cable returns above 1.40 mark and hits new 34-month high at 1.4052 after brief dip to 1.3980 in early European trading on Monday.

Bulls attempt to sustain break above psychological 1.40 barrier after registering a marginal close above last Friday (the first close above 1.40 since mid-Apr 2018).

Pound is supported by UK economic recovery hopes and signals that zero-rate is not on BoE’s agenda.

The PM Johnson will announce today a plans of gradual easing of strict measures that adds to positive sentiment.

Clear break of 1.40 pivot would open way for test of another significant barrier at 1.4090 (top of falling thick monthly cloud), violation of which would further strengthen bullish stance.

Daily studies maintain strong bullish momentum, but overbought RSI and Stochastic warn of headwinds that may result in consolidation before bulls resume.

Rising 5DMA offers initial support at 1.3953, with extended dips to find solid ground above ascending 10DMA (1.3898) and keep bulls intact.

Res: 1.4052; 1.4100; 1.4150; 1.4200
Sup: 1.3980; 1.3953; 1.3898; 1.3829