Tumbles on the GBPUSD surge
The GBPUSD corrected to a key support area and then surged about 100 pips to new month highs (see prior post).
Meanwhile over in the EURGBP, the 0.7910 high (topside trend line - see chart above) held earlier in the London session, and that started the tumble lower. The fall has taken the price through lower trend lines, and that momentum has now taken the pair to the first key support target against the 100 hour MA and the 38.2% retracement (see chart above). Risk buyers took advantage of the low risk trade and have snapped the price back up to 0.7825 area, but the sharp fall has the buyers on the defensive now. The resistance is now at 0.7836 (the prior intraday low and 50% of the last leg lower from 0.78588 to 0.7813 - see chart below). That is the close risk level for shorts out there now. Stay below and the sellers remain in firm control.
Should the move lower resume and a break of the key support occur, there are other support targets lining up. The 0.7781 is the 200 hour MA and the 50% - always a nice combination for a low risk trade. Before that the 100 hour MA on the 4-hour chart has gotten attention from traders of late (see the big Red arrows in the chart below). Keep an eye on that level too should sellers continue the trend.
