Why GBP/USD was up Today?

9/28/2020 10:09:00 PM

 GBP/USD Today Analysis

  • Lowered the odds of seeing negative interest rates soon from the Bank of England
  • Hopes that Brexit talks will improve as we head into the last round of scheduled talks this week

This prompted a full daily ATR (roughly 135 pips) move higher in GBP/USD to retest a previous consolidation range between 1.2900 – 1.3000. With the good vibes likely priced in for the session (as indicated by the overbought signal on stochastic), is this an opportunity for the bears to short back into the medium-term bearish trend on Sterling?

If you are a bear, maybe consider another retest and reversal of the 1.2900 handle before building a short play in case we see further dollar weakness off of the early round of positive risk sentiment to start the week.

If you’re a bull on GBP/USD, then a pullback down to the minor area of interest around the 1.2830 handle may be enough to draw in intraday trend players, especially if stochastic makes its way back to signal oversold conditions.

If broad risk sentiment holds positive to keep pressure on USD and we see bullish reversal patterns in that area, consider a long swing play with a target of the 1.3000 major psychological handle, reachable in the next few sessions if Brexit / monetary policy rhetoric continues to improve.
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