The GBPUSD extended to new highs today but has since come off in a corrective market. The 38.2% of the move down from the April 30th high comes in at 1.56613. The GBPUSD reached a high of 1.5676 today but backed off. THe price today also moved above trend line resistance today at the 1.56445 level (see chart above).
With the price move back below these levels, the buyers are a little more nervous. Through the Bernanke testimony a move above these levels will be needed to turn the intraday bias back bullish for the pair. Failure to do so, will likely lead to more of a corrective move lower. Look for sellers against the 1.5644 area with stops on a move above.
On the hourly chart, the price has trend line support at the 1.5609 . The price is currently inching below this level but action is so far limited. If sellers remain, look for a move toward the 1.5591. This was the high from the opening yesterday and was where the market corrected to after the 1st surge higher yesterday. The 38.2% of the move down up from last weeks lows comes in at 1.55678. This should be a key test for the sellers. On a break, the market will be eyeing the 50% and 100 hour MA (blue line in the chart below) at the 1.55342 area.
The GBPUSD has been supported as a safe haven currency over the last 3-4 trading days. As such, the EURGBP has been trending to the downside with new lows reached yesterday. The price of the pair is up today, however, as profit takers have been leaning against a support trendline off the daily lows.
The correction off the lows today for the EURGBP has helped pressure the GBPUSD a bit. That correction ( in the EURGBP) has the pair approaching the 100 hour MA at 0.7876. This will be a key level to eye for sentiment. If the EURGBP starts to rebound through this level, the GBPUSD may look to continue it’s correction to the downside.
