GBP/USD Technical Analysis: Rallies to close weekly bearish gap- UK Cabinet said to expect backstop text to be completed today

   •  The pair built on its intraday recovery move and caught some aggressive bids in the last hour on news that the UK Cabinet is said to expect backstop text to be completed today.

   •  A sustained move beyond a confluence region, comprising of 50-hour SMA and 23.6% Fibonacci retracement level of the 1.3175-1.2827 recent slump, was seen as a key trigger for bullish traders.

   •  A follow-through up-move beyond 38.2% Fibonacci retracement level, helping the pair to close the weekly bearish gap, indicates that the pair might have already formed a temporary base.

   •  Technical indicators on the 1-hourly chart have started moving into overbought territory but are yet to catch up with the positive momentum on 4-hourly/daily charts, warranting some caution.

   •  Hence, any subsequent up-move seems more likely to confront some fresh supply near the key 1.30 psychological mark – coinciding with 100-hour SMA and 50% Fibonacci retracement level.
 

GBP/USD 1-hourly chart