The pair GBP/USD gained some new offerings in the afternoon of the US and jumped to a new high of 7 months in 1.2965. Earlier in the session, the pair has pulled back towards 1.29 and found support around that level. At this time, the pair is trading at 1.2955, an increase of 0.4% on the day.
The strength of the pound together with an index stationary on the dollar of EE.USA allowed the pair to add to their daily gains before the end of the week. After another weak test of the level 99, the DXY lost momentum and has been spending the last hours in a range very tight around 98.90. The fact that there are no catalysts fundamental behind the recent upsurge suggests that the flows of end-of-month may also be supporting that motion.
The pair was able to gain almost 600 pips in April, as they recorded strong weekly gain in the last three consecutive weeks. The main reason behind this strong performance is the announcement of the quick selection in the Uk, since increased expectations that the process of Brexit would be completed more quickly and smoother than initially anticipated. When the First Minister May announced the decision on 18 April, he stressed that Britain needed security, stability and strong leadership after the referendum of the EU.
The RSI on the daily chart shows overbought conditions above the level 70 and a technical correction could be seen before another bullish attempt.
Next resistance for the pair is aligned at 1.30 (psychological level) and waiting to 1.3060 (maximum of 28 September) and 1.3120 (high of the 22nd of September). On the other hand, the supports are located at 1.2900 (psychological level), 1.2840 (minimum of 27 of April) and 1.2760 (21 April).