The last time the charts were building for a GBP/USD bull reversal, optimism got trampled by the coronavirus.
A key day reversal, lower low, higher high and close above previous close, on March 20 was followed by fresh losses back into the low 1.14s.
However, that signal plus a bullish engulfing candle Tuesday has put a turnaround back into play.
Candlestick signals need confirmation and a bull close today could set up a more significant short squeeze.
Big hurdles stand in the way at 1.1911 and 1.1955, 10-DMA and March 20 high respectively.
However, as sterling gains traction, Fibonacci retracement levels become viable targets and 50% of the steep 1.3200 to 1.1413 March decline comes in at 1.2306.
Midway through the week, weekly action takes on more significance.
A potential hammer candle (bullish) this week and a long lower shadow last week point to supply fade.
A sterling reversal is in the offing, but traders will be cautious, given uncertainty surrounding the coronavirus and its impact on the UK.