GBP/USD: 1.3340 on the cards post renewed bullishness? - FXStreet

Valeria Bednarik, chief analyst at FXStreet explained that the Pound staged an impressive recovery ever since the  announcement that Theresa May will become UK’s new Prime Minister this Wednesday, with the GBP/USD advancing up to 1.3294, its higher in over a week, to settle a few pips below it by the end of the US session.

Key Quotes:

"The new Conservative Leader has emphasized that she will honor the decision of leaving the EU,  bringing some relief to markets, as investors were seeing that the UK government had no plan for a Brexit victory, and that the referendum took them to a political limbo."

"All eyes are now on the upcoming BOE's meeting next Thursday, and a 25bps seems to be already priced in, although further easing remains on the table, and may result in more Pound woes. In the meantime, the short term technical picture shows that the pair may now correct lower, as in the 1 hour chart, technical indicators are retreating within overbought territory, although the 20 SMA heads sharply higher well below the current level, limiting chances of a sharper decline."

"In the 4 hours chart, the Momentum indicator heads higher above its 100 level, whilst the RSI maintains its bullish slope around 71, as the price extends above a mild bullish 20 SMA, all of which supports some further advances, at least  up to 1.3340, a strong static resistance level."