The GBP is the strongest currency today (see https://www.forexlive.com/blog/2014/09/17/fomc-day-with-some-other-data-mixed-in-september-17-2014/) rising against all the major currencies – including the greenback. There was good and bad out of the UK and of course the Scotland Referendum is awaited tomorrow, but the buyers are comfortable at the moment.
GBPUSD moves toward the 50% target at the 1.63465. There should be a pause against the level will stops on a break.
From a technical perspective,the pair received a boost yesterday on the break back above the 100 and 200 hour moving averages (blue and green lines in the chart above). The subsequent high yesterday, extended above the high for the week before correcting back toward the 100 hour moving average in the New York afternoon session(see blue line test in the chart above)
That support held in the Asian session (with a positive bias as well), and European traders took the price toward the next target at the 1.63465 level. This level represents the 50% retracement of the move down from the September high (see chart above).
There should be some profit taking (a pause) against this level, but remember the next 24 hours will be filled with the ebbs and flows from the vote. If trader’s sentiment loses the fear from a potential yes vote (and today’s action supports that idea), they could take the price through this level (look for stops) and work on the next target at the 1.64164 area (61.8% retracement).
Looking at the 5 minute chart below, the price had its ups and downs with the economic data but has found support buyers against the trend line and the 100 bar MA (blue line in the chart below). Stay above and the buyers remain in control from an intraday perspective. Move below and there may be some position squaring.
The GBPUSD has been tracking above the trend line and 100 bar MA. RISK for the day.
