Pound Looking For Confirmation

The pound sterling reversed the downward trend against US Dollar, benefiting from building on the solid support located at 1.3840, pushing to the upside to re-test the 1.3950 resistance level, recording the highest of 1.3986.

On the technical side, today the pair is hovering around its highest level during morning trading at 1.3960, supported by the price stability above the psychological barrier of 1.3900.

We noticed the contradiction between the positive motive of the 50-day moving average that supports the bullish idea, and the RSI losing its bullish momentum.

Therefore, we prefer to stand aside for the moment, to be in front of one of the following scenarios: To continue rising, need to breach 1.3975, which is a catalyst that increases the probability of touching 1.4000 and then 1.4020, respectively.

Activating short positions requires us to witness a clear and strong break of the support level of 1.3920 and the most important 1.3900, which facilitates the task of resuming the decline towards 1.3875, and then 1.3785, a next stop.

S1: 1.3875	R1: 1.4020
S2: 1.3785	R2: 1.4075
S3: 1.3730	R3: 1.4165