The cross rose on Friday as the pound was sold against its major counterparts on fading risk mode and traders awaiting BoE’s policy meeting next week.
The British central bank is unlikely to sign is unlikely to signal any tapering of its Quantitative Easing Program until the extent of economic recovery from the pandemic becomes clearer, with most of the analysts expecting delay in decisions about the policy changes until June.
Fresh strength signals that bulls regained traction after the action held within narrow consolidation in past three days, with key barriers at 0.8720/30 zone (multiple upside rejections/top of falling daily cloud.
Clear break here would generate bullish signal for continuation of recovery from 0.8472 (2021 low posted on Apr 5) and expose pivotal Fibo barrier at 0.8761 (38.2% of 0.9229/0.8472 descend), violation of which would add to reversal signals.
Monthly chart shows strong advance in April (the biggest one-month gains since May 2020), after five months in red, and formation of bullish engulfing pattern that boosts signals of reversal.
Daily studies are gaining positive momentum and support scenario.
Strong support at 0.8674 (10DMA) which kept the downside protected during the past week, needs to hold and keep near-term bias with bulls.
Res: 0.8720; 0.8730; 0.8761; 0.8796.
Sup: 0.8701; 0.8674; 0.8658; 0.8631.
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