Consolidates near lows
The EURGBP peeked yesterday at the 0.7423 level. The level corresponded with a trend line coming down from the 2013 highs (see chart below).
The pair moved to a lower trend line, and stalled yesterday. Today, traders broke through that trend line an extended to another lower trend line where over the NY session the price has consolidated above and below. The pair is also trading above and below the 38.2% retracement of the move up from the December 7 low. That level comes in at the 0.73238 level. The low today bottomed at 0.73118. This was short of the next downside target at the swing low from December 23 and the swing high from December 16 at 0.7306 and 0.7304 levels respectively. This is a key support area for the pair. We have been trading within this area since breaking on December 21.
Look for buyers to line up against this support level until that time it is broken (stops below). Corrections, however, will likely be sold as well as the peak was key and both the 100 and 200 hour MAs are starting to turn over.