GBP/USD focus turns back towards the 200-day moving average and key near-term levels in trading today
The pair made an effort to get above the 1.2800 in trading yesterday but buyers failed to keep a break above the figure level, before price action retreated towards 1.2700 levels.
And amid the firmer dollar and softer risk mood today, the retracement lower continues as we see cable ease under 1.2700 to a low of 1.2651 earlier and that brings back the focus to the 200-day MA (blue line) @ 1.2689.
For buyers, keep a daily hold above that and that should provide some reassurance to the recent upside momentum (ten consecutive days of gains).
But they also need to do some work to try and seize back near-term control now:
The drive lower in cable sees price action fall back under its 100-hour MA (red line) and that means the near-term bias in the pair is now more neutral. As such, buyers will need to try and get back above that level (now @ 1.2709) to seize back near-term control.
Looking at other key downside levels to watch, the confluence of support near the 200-hour MA (blue line) @ 1.2624 will be the key area to be mindful about ahead of the weekend.
Stay above that and buyers are still in with a shout to keep the upside momentum running. However, break below the 200-hour MA and the near-term bias turns more bearish.
The 200-day moving average highlighted above is also a level to watch but a key focus will now also turn towards the near-term levels pointed out above.
For now, the risk rally is taking a breather and seeing some correction and that is helping the dollar a little. But with the Fed not taking away the punch bowl yesterday, the dollar may still be set for some trouble down the road if the risk rally resumes.
That said, the technical levels above will be the ones to watch in gauging the momentum so keep an eye on that in identifying the push and pull in the sessions ahead.