Also moves above 38.2% retracement. Tests next target.
The GBPUSD has moved above the 100 hour moving average (blue line in the chart below), at the 1.4719 level. The 38.2% retracement of the move down from the April 8 high to the April 13 low was also broken at 1.47218 (see chart below). These levels are now support for the pair. Also watch the swing low from April 1 at the 1.4739 level for closer support.
The next upside target has been reached at the 1.4769 (50% of the move down) to 1.4775 ( swing low from April 2). This is soliciting some profit taking on the first look. There might be more up and down activity for a little bit now. The range for the day is about 170 pips which is congruent with the 22 day average range for the pair.
If the bulls really push higher, the 200 hour moving average (green line in the chart above)comes in at 1.4796. A move to that level would imply a 194 pip trading range for the day. It is doable but it would be a pretty good move for the day.
Overall,, the move lower over the last few trading days took the price of the GBPUSD to new lows going back to June 2010. The pair also moved below the lowest close for the year at the 1.4745. The close higher yesterday, and now the surge higher today has the pair back above that level. It looks now like a failed break. The market might look at the 1.4745 level as a level to lean against on the bottom now. This dovetails with the swing low from April 1 (at 1.4739) and helps to define risk for buyers (provide a level to lean against on dips).
