The Pound surged more than 150 pips on Friday amid a retreating US Dollar, which triggered stops above 1.31 to fuel the advance towards 1.3175, alongside hopes a cross-party Brexit deal could be reached in the next couple of weeks. This move could change the market sentiment to the bulls’ side if these recent gains are held by the buyers. Furthermore, the Conservatives have lost 1,334 councilors over the weekend in the English local elections, with Theresa May saying voters wanted the main parties to "get on" with Brexit. On that note, talks will resume on Tuesday as the UK government is on a holiday today.
The Pound touched the 1.30 pivot point on Friday and bounced strongly by breaking above key resistance levels and the 200-day moving average. The Sterling retraced back towards 1.3115 (S1) today, testing the old resistance as the potentially new support. If the bulls will be able to break above 1.3175 (R1) in the next couple of sessions, then that could signal a major trend shift in this market, possibly taking the Cable much higher.
Support: 1.3115 / 1.3080
Resistance: 1.3175 / 1.3240