The GBPUSD was down on it’s back by the time NY traders entered, but was in the midst of a trend day lower. The morning post (“The Weakest Currency of the Day”) on the pair was looking to see resistance hold against the 1.59507 low from Oct 3/6, and indeed that level kept a lid on the pair (the high extended to 1.5943). The price has rotated down and has taken out the low at the 1.5903 level. The bears remain in control.
GBPUSD extended to new day lows
As per the morning report, the low from November 2013 remains the next target at the 1.5853 level and bottom trend line on the daily chart comes in at 1.5843. That should solicit some profit taking.
On the topside now, watch the 100 bar MA on the 5 minute chart (see chart below). The price has been below the line since breaking earlier today. The line has caught up with the price as the trend momentum slowed. A move above does not spell the end of the bearishness, but it says that traders might play both ways for the time being. A move above the 200 hour MA (green line in the chart below, would be more of a concern.
The UK employment report will be out tomorrow. Today, the inflation data was lower than expectations and it accelerated the trend selling in the pair today.
When the 100 bar MA got close, the price moved away.
