GBP/USD: 1.35 area is important for sterling - BBH

Analysts at Brown Brothers Harriman explained that the new UK government was an element of stability after a vacuum emerged after the referendum. 

"The Bank of England's reluctance to immediately back up its sober economic assessment with change in monetary policy also helped sterling recover.   

However, investors have not given up on BOE easing. 

Official signals indicate it is a few weeks away, and that it is unlikely to be limited to small rate cut. 

The $1.35 area is important for sterling.  It is a neckline of a potential head and shoulders pattern, which if confirmed would project toward $1.4200.  The 20-day moving average, which sterling has not been above since the referendum is found near $1.3520.  

The technical indicators are constructive, but the price action before the weekend was not encouraging, even before the news of the coup attempt in Turkey.  

Support is seen initially near $1.3120-$1.3150."