The good/bullish news for the GBPUSD is that the pair held above the 100 hour MA for the second time, on the last two dips (see blue line in the chart below). Other bullish news, is that the price held above the “yellow area” in yesterday’s trading. That level is the home to a number of lows going back to November 17 (see green circles). The price is also above the midpoint of the move down from the November high to the December low. That level comes in at 1.56824. Can something be built off of that today? The short answer is “Maybe”
GBPUSD has been confined to a range but most recent clues are more bullish with work to be done.
The bad news is the the rallies off the 100 hour MA levels have been modest (around 55 pips). The pair yesterday was capped against a trend line connecting the most recent highs on he hourly chart (see blue circles).
Nevertheless, the good/bullish outweigh the bad in this chart. However, there is further work to be done. That work will start with a move above the topside trend line and 61.8% at the 1.57159 area (see chart above). Challenges are not over there. The 1.5734-40 area are recent highs and lows, and that will also need to be conquered (Red circles). Above that area and the upside should open up a bit for further gains with the recent highs at 1.5762 and 1.5824 targets.
Looking at the daily chart, the consolidation at the lows looks a real mess. Nevertheless, the broken 61.8% of the move up from the 2013 low to the 2014 high comes in at 1.57203. Yesterday the high extended to 1.5716. Needless to say, this now makes the break of the 61.8% (at 1.57159), the high from yesterday at 1.5716 and this 1.57203 retracement level as a key for buyers. The 1.5801 trend line will be a target on a break, followed by 1.5853 (see chart below).
Can the buyers off the lows today, keep the momentum going? Watch for close support at the 50% midpoint area at 1.56824 for the early trading day clue (the midpoint of the day comes in at 1.5676 so perhaps down to there for buying risk). What we are seeing may be a bullish start. It may not be. However, with a range narrow for the day (at 58 pips) and the price higher, it might be worth a look. It is not a love affair but a “like affair”. With little going on today, don’t expect a rose garden though. Just an idea.
GBPUSD daily chart highlights the up and down non trending nature of the pair going back to mid November.
