GBP/USD Comes Off The Highs And Moves Toward Intraday Support

The GBP/USD, after yesterday’s (Thursday) choppy action, jumped on the dollar selling bandwagon and advanced sharply.  I wish I could say I saw it coming but momentum did increase as the price rebounded back above the 1.6000 level and the market simply stepped higher and higher.

The pair did benefit overnight from better than expected Nationwide House Price data which showed a gain of 1.2%  for May which was much stronger than the expected decline of -0.9%. Moreover it represents the 2nd gain in the last 3 months. Good news and perhaps an indication a bottom is in place.

From a technical perspective the pairs bias is to the upside. The market did use the 100 hour moving average as a springboard in early trading today and as mentioned, the move back above the 1.6000 level seemed to attract short covering and new buying interest.  The high overnight reached a new move high of 1.6181, and post that 1.6173.  The lower high seems to have attracted some selling interest.  these levels should continue to act as resistance today.

On the downside, intraday support comes in at the 1.6070 to 1.6090 level where the 100 bar MA on the 5 minute chart is located and the 38.2% retracement of the days range. Watch this level to provide some support.

The longer term target remains at the 1.6427 area which corresponds with the 38.2% retracement of the big move down from the 2007 high of 2.1160 and the low at 1.3502.

Subscribe by RSS Subscribe by Email