It is a step in the positive direction but not out of the woods

The GBPUSD stalled at 1.21377 yesterday and again in the London morning session. The low in the NY session moved below those levels but only by 5 pips. The subsequent low re-established the 1.21377 level as support as the low could only extend to 1.21397 before rebounding (see prior post on the GBPUSD).

The rally higher has taken the pair back above the closing level from yesterday at the 1.2165 level. Another bullish sign. We currently are trading at 1.2184 as I type. The high price reached 1.2194 earlier in the session. That level and the 38.2% retracement of the move down this week at 1.2196 are the next targets for the pair. That level was also close to low from December and January on the daily chart below.

The sellers seem to be lightening up their position. The holding of support and the move into positive territory is a start. There is more work to be done to get even more buying. The 100 hour MA at 1.2211 looms large ahead. The price has not closed above that MA since Feb 24th

When the price goes down goes down 8 of the last 9 trading days, and you get an up day, it is a positive development. If the buyers are to keep the momentum going, they need to show that the buyers can keep the above support AND take out targets. With employment tomorrow, realistically a move above the 100 hour MA might be a tall order. In fact, look for sellers on a test. However, it will be in play through the employment report tomorrow