There was nothing untoward about the figures and it shows that the sector is humming along at a fairly decent rate. Since the test of 1.70 it’s been down hill from there on in and so we find ourselves testing strong bids down here at 1.6900. This will be the first major test of the 1.70 rejection and we’ll see how much the market does or doesn’t want to give up on it. If we break the big figure then the 55 h4 ma awaits at 1.6889 and has acted as support since early April. Just below that is the 100 h4 ma at 1.6849.

GBP/USD h4 chart 09 05 2014

GBP/USD h4 chart 09 05 2014

On the daily chart there’s not really anything decent in the way until we get to the low 1.68’s, though 1.6850/67 should hold some support.

GBP/USD daily chart 09 05 2014

GBP/USD daily chart 09 05 2014

1.6710/20 looks to be the perfect spot to counter any decent move down as it’s right along the October support line and 55 dma with a prior S&R level at 1.6724.

If we hold 1.69 then there should be mild support at 1.6915 with stronger at 1.6940/50.

I’ve knocked some of my short off here on this first test as I feel like getting some of it in the bank. At the moment the lack of any bounce all the way down, and willingness for the sellers to keep it under pressure suggests we may see 1.69 go, but we’ll wait and see.