If the EURUSD weeks range of 159 pips was non trending, the GBPUSD was even more so. The 152 pip high to low range last week was it’s lowest range going back to July1st 2007. The most narrow range prior to last week was 174 pips. There is room for an extension this week and the first move is to the upside. The question becomes, will the momentum continue and to where?
Looking at the hourly chart below the price held support against the 200 hour MA at the 1.5802 level. The low reached 1.5800. Good hold. Bullish. The move back above the 100 hour MA (blue line in the chart below) , gave more upside momentum and the comments from Bernanke gave traders a reason to sell the dollar and buy the pair.
The pair is testing the topside channel resistance on the 5 minute chart below. That level comes in at the 1.5953 level currently and may give a reason for some profit taking. Above that level, the high for March is 1.5973 and the high on the last day of February reached 1.55904. These are the topside targets.
On the downside, I will look for support against the 1.59147-1.5924 to hold. If the trend move from the low today is to continue, I look for the support buyers to hold this area (See 5 minute chart above). The burden of proof is on the sellers to overtake the buyers in a trend move to the upside. If they cannot, they will be forced to cover and the trend has the potential to continue.
