U.K. Prime Minister agreed to publish the Brexit plan in an official White Paper later in the day which “will reflect the 12 objectives” outlines by PM May last week in her big Brexit speech. The statement prompted the GBP traders to feel safer for the currency and pushed the British pound higher against all the majors, a day before the big meeting with the U.S. President Donald Trump. The two countries leaders are strongly awaited to discuss a possible trade agreement as Mrs. May plans to drive U.K. out of the single market free trading.
GBP/USD – Technical Outlook
The GBP/USD pair created an aggressive upward movement and surged more than 3.7% since last Monday. Sterling recorded a fresh six-week high at 1.2673, on Thursday, versus the U.S. dollar and reached all the three levels that we recommended in a previous analysis (see previous analysis here: GBP/USD, EUR/GBP and FTSE 100 Ahead of U.K. Supreme Court Announce Judgment).
Due to the U.K. Supreme court ruling, the pair dropped to 1.2420 and then managed to recover all of its entire losses until the 1.2545 barrier. On Wednesday, the cable surpassed above the latter obstacle and met our target at 1.2635. Meanwhile, the pair printed the sixth positive day in a row and since the U.K. Prime Minister May’s speech on January 17[SUP]th[/SUP], we have seen a recovery run more than 600 pips.
The technical structure, on the 4-hour chart, suggests further upside move, if the price climbs above the aforementioned six-week high. Then, the price will have the opportunity to challenge the 1.2730 resistance level. On the other hand, a failed attempt will drive the pair back to 1.2545 support barrier. MACD oscillator is holding within the positive territory while RSI is approaching again the overbought area. Moreover, the three SMAs are sloping upwards confirming the recent bullish attitude on price.
