The British Pound was among the best performers this Tuesday, extending its upward corrective movement against the greenback to 1.5411, reaching the 38.2% retracement of the 1.5817/1.5161 decline, by the pip. Pound's strength was the result of the announcement of a series of M&A, as Mitsui Sumitomo acquired Amlin for £3.5bln and MBK purchased Tesco’s South Korean business for £ 4.2bln on Monday.
The pair retreated from the high, but found intraday buying interest around 1.5350, now the immediate support. Technically, the 1 hour chart shows that 20 SMA heads sharply higher below the current level, whilst the RSI consolidates around 66. The Momentum indicator however, is heading lower from overbought territory, not enough to confirm a bearish breakout, but maintaining the upside limited in the short term. In the 4 hours chart, the technical indicators maintain a strong upward momentum, despite being in overbought territory, whilst the 20 SMA is finally turning north well below the current level, supporting additional gains on a break above the 1.5410 level.
Support levels: 1.5350 1.5315 1.5280
Resistance levels: 1.5410 1.5450 1.5490