FXstreet.com (Barcelona) - The Sterling is attempting to perform a recovery move and break above 1.3850, Asian session high, to advance towards 1.3900.
The pair is struggling to remain above the 20-day exponential moving average and break 1.3850 to continue growing towards next resistance level at 1.3900, and above there, The path would be clear towards Mar 6 low at 1.4035. On the Downside, failure to take 1.3850 would put 1.3750 back into focus, and below here 1.3685.
In a longer point of view, Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, observes the Pound forming a downward sloping wedge with a tendency to break lower: Still working in an interminable, horrid, downward-sloping 'wedge' formation and looking set for another downside probe this week. The low could be anywhere, and we would point out that rarely has Cable traded below 1.3500 (1.6 Standard Deviations from the mean since 1982). One-month at-the-money implied volatility is still relatively high at 17.00% and is likely to edge back up to 25.00% whether we trade below 1.3400 or above 1.5000.