Overview:- By analyzing the daily technical chart we can see that pair is heading north side and marked a high of 1.3173 which means it is rising up with a full of bullish momentum. Presently pair is doing very well for buyers and it is making successively higher highs and higher lows as it is trading in purely uptrend, which indicates that further rally is still awaited. The 1.3300 level is a psychological level so we will get further bullish signal above this level and a daily closing above this level will open the way towards the 1.3500 level.
Fundamental Analysis:- The greenback, on the other hand, was dumped on the back of a shrinking US Treasury yield-curve as risk aversion led. On Friday, the UK finally left the Union after over three years of struggle. The news has a limited impact as it has already been priced in long ago, while the relationship between the two economies will remain the same. The main risk factor now is Scotland, as the country wants to remain within the EU. PM Sturgeon has again asked UK PM Johnson to authorize a referendum in Scotland.
During the last trading day of the week, the UK released December money data, with M4 Money Supply up by 0.1% MoM. Mortgages Approvals were up to 67.241K, while Consumer Credit rose to £1.218B, all of them above the market’s expectations. This Monday, the UK will see the release of the final version of the January Markit Manufacturing PMI, foreseen unchanged at 49.8.
Technical Analysis:- A short term uptrend line is lying which is providing strength on the pair and the way bulls are reacting it seems like they are not ready to stop in the early phase however we need a clean sweep of 1.3300 with a daily closing above the mentioned breakout level.
We will keep our view bullish on the pair as long as 1.3100 level remains intact. Odds are in favor of bulls and intraday bias remains bullish on pair. Pair is moving above the minor and major EMA lines which is providing us bullish signal.
The bullish crossover on MACD indicator is providing us bullish signal. .RSI has turned up above 50 territory which suggests go gor long with tight stop loss.
What next:- The 1.3300 level is immediate resistance level followed by 1.3350 whereas 1.3100 level is strong key support level followed by 1.3050 level.
Trade idea:- Based on chart and studies above we can suggest that buy the pair around current levels 1.3170-50 target is 1.3260 and 1.3300 sl is 1.3100 level.
