GBPUSD gapped up over the weekend and carried on with its bullish run on Monday, bringing price up to the resistance at the 1.4700 major psychological mark. This level has held as a strong area of interest in the past and might continue to do so.
If this area keeps gains in check, price could head back to the support around the 1.4100 major psychological level. The resistance lines up with the 200 SMA dynamic support and a break past this area could spur a longer-term climb. For now, the 100 SMA is safely below the 200 SMA so the path of least resistance is to the downside.
However, stochastic is still on the move up, indicating that buyers might have enough energy to push for an upside breakout. If so, GBPUSD could head to the next area of interest around 1.5200. RSI is also heading north so there’s enough bullish momentum until the oscillator hits the overbought zone.
Brexit polls have been mostly responsible for pushing GBPUSD around recently, as more surveys have shown a shifting lead in favor of the remain camp. The actual EU referendum is scheduled on June 23 and profit-taking could force the pound to return its recent wins before that day.
Additional volatility is expected around the time the polls close until the official results are announced, as traders are likely to keep close tabs on any private exit polls or indications of which side might win. Keep in mind that a vote to exit could mean sharp declines for the British currency.
Meanwhile, Fed head Yellen has a speech scheduled in today’s US trading session and this could also mean some movement for GBPUSD. Reassuring remarks from the Fed head could prop up the dollar while dovish comments could spur an upside breakout for GBPUSD.