Falls as EURUSD plays some catch up
The EURGBP surged yesterday as it was the GBPUSD turn on the back of the dovish BOE. With the much better jobs report, the focus is on the dollar again and the EURUSD is playing some catch up. As a result the EURGBP is back down.
Looking at the hourly chart, the pair has fallen toward the 50% of the move up from yesterday's low at 0.71188, and the 100 hour MA (blue line in the chart above) at the 0.71155 level. The low fell below that level to a low of 0.7107 but quickly rebounded. However, it is back down looking to test that support level.
If the dollar is to continue to get stronger, it may be that the EURUSD continues to lead the way. That should see a break of the 0.7115 level The idea is the GBPUSD has gone down a lot in the last few days, the pair corrected. ECB is looking to add more stimulus. UK may not tighten but they are not looking add.
Of course, if the price action can not get below targets, traders will trade technicals vs. stories. That 0.7115-18 level is key. On the topside, the 200 hour MA at 0.71469 should limit the upside should there be a rally. Yesterday, the price tested the level, then broke above. In the early Asia-Pacific session, that 200 hour moving average level held support. It is now resistance once again.
