The Pound bounces off a key support level after President Trump withdrew his criticism of U.K's Prime Minister and enforced that a trade deal between the U.S and the U.K is still a possibility. The current political situation points towards a soft Brexit which is positive for the Pound. Moreover, the possibility of a trade deal with the U.S ignites further positivity for the U.K economy. From the greenback's side, Sterling also gained momentum as the U.S Dollar weakened due to a disappointment in the U.S Consumer Confidence figure.
Today, investors need to keep a look out for any fresh news in regards to U.K politics and Brexit. Investors need to also keep an eye on the U.S Retail Sales figure which will play a role in determining the weekly trend for the U.S Dollar.
After dropping towards the 1.414 Fibonacci extension, the pair formed a Bullish Reversal ABCD pattern. Following the bounce off the 1.3110 support level, the pattern signals a rise towards 1.3290 which coincides with the 200-period moving average (purple). Adding to the bullishness, prices have recently broken above the 50-period moving average (yellow).
Support: 1.32110 1.31332
Resistance: 1.32901 1.33604