The pair is in the hunt for a fourth straight day of gains, building strongly on the turnaround in sentiment this week.
The drop below 1.3400 has been scavenged, with buyers now hoping to extend the more positive momentum from a technical perspective. The bounce in the past few sessions is seeing price now creep above the 100-day moving average (red line) @ 1.3512 and that is a plus point for buyers to establish the next leg higher.
The BOE and US non-farm payrolls are the two key risk events still to watch for the pair in trading this week so that will make things a bit tricky before the weekend comes.
On the former, we will surely see a rate hike tomorrow but the big question will be how forward do policymakers want to be in teeing up the next one. That will set the tone for the pound for the remainder of the week.
But from a technical point of view, keep above the 100-day moving average and buyers will be in a good spot to try and build on the next leg higher. There is some resistance from the 50.0 retracement level @ 1.3553 but beyond that, we might see a good chance of the bounce heading towards the 200-day moving average (blue line) perhaps.
On the flip side, failure to hold a break above the 100-day moving average will be a big reset to the recent bounce. The near-term technicals will start to come back into the picture as such with focus on the key hourly moving averages, now seen @ 1.3439-74.
