Pound buoyed as buyers keep a defense of key technical levels for now

Technical Analysis

Author: Justin Low | gbpusd

The pound leads gains as it rebounds in European morning trade

GBP/USD 12-04
The technicals are leaning in favour of the pound to start the week, as cable bounces off its 100-day moving average (red line) @ 1.3680 and is pushing to a high of 1.3745.
This comes as we also see a retreat in EUR/GBP upon testing levels near 0.8700 as buyers (pound sellers) lose altitude in a drop to test the swing region @ 0.8640-45.

EUR/GBP D1 12-04
That is a key one to watch for the moment as a hold could see buyers (pound sellers) turn things around but a break lower will bode well for the quid instead.

Going back to GBP/USD, the rebound comes after a bit of a double-bottom around 1.3670 when you drill down to the hourly chart. The daily chart also offers support in a similar fashion at 1.3670-73 with buyers leaning on the 24-25 March lows.

For now, this suggests pound buyers are looking to form a base but there needs to be more work to convince of a major turnaround. But the early signs are looking good at least.

Just be mindful that the UK is also reopening non-essential shops today so that barring any setbacks in the next few weeks, that could pave the way for a further economic reopening going into the latter stages of Q2.

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