How Does Apple Pencil Communicate With The Ipad?

The touch screen works with the finger due to the finger changing the capacitance of the sensors in the screen. Why you get better results with clean dry skin. The touch screen is not pressure sensitive, it is all a matter of electrical charge. The iPencil is most likely doing the same thing. The tricky part is designing the pencil to match the human body's electrical properties.

The new screen SJF spoke of.

The  Prncil if you had x-vision.

X-ray vision glasses. (Opional.) 🙂

It appears it just uses the touch screen. Watch the video.

https://www.apple.com/apple-pencil/

Bob is correct. The iPad Pro has special technology in the touch screen enabling it to work with the Apple Pencil... that's why the Pencil doesn't work on any other device.

Given it has a rechargeable battery I would guess it also uses Bluetooth. We will know when it is released.