Sterling-dollar pair could move higher in the coming days
Theresa May is expected to lose the vote in the Parliament on Britain's divorce deal. Traders have already priced this to a large extent and the evidence of this can be seen in the option’s market. A large number of speculators are expecting an upward move for sterling in the coming days. The pound-dollar two-week risk reversal, a gauge of market positioning, has changed substantially from its previous reading of -2.5% to above 0. This is the highest level since late January 2018 and at that time Sterling-dollar pair was trading above the 1.40 mark.
The intra-day 2-hour chart shows that the price is trading within the downward channel, however, the technical study shows the price is about to explode. The first confirmation of this will come if the price breaks the downward trend line (orange colour) and the second confirmation of this will be when the price moves above the 1.32 mark. We have not seen this level since November 2018.
The RSI is showing that the momentum is building up.
The minor support zone is shown by the dotted horizontal green line and the major support by the solid horizontal green line.
The minor resistance zone is shown by the dotted horizontal red line and the major resistance by the solid horizontal red line.
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