Rises on the back of the dollars weakness

The GBPUSD rose on the back of dollar weakness from the US employment report, but the gains were contained within the trading range over the last few weeks.

Looking at the hourly chart, earlier in the trading week, the price stayed below the 100/ 200 hour MA ( blue and green lines in the chart above) for most of the trading week. The downside was pushed - with the price falling below the lower trend line on Monday, Tuesday and Wednesday. I was waiting for that line to give way and fall further, but it could not gather any momentum. The move higher today was over after the first 40 minutes - with the vast majority in the first 5 minutes. The pair consolidated for the rest of the day.

In the move higher, the 100 and 200 hour MA (blue and green lines) were broken along with a topside trend line (both currently at 1.4845). This level will be the support level to eye for next week. Closer support/risk will come at the 1.4867-1.4870 level. This was the high from Tuesday, Wednesday and Thursday. Stay above these levels and the buyers remain in control. Move below and traders will be exiting their longs.

With the pair still contained by recent highs, those high level will be the next targets. A move above the 1.4921 will target 1.4952 and then the 1.4989-1.5000. Although those levels are not so far away, traders in this pair have the May elections in the forefront of their minds and with no clear favorite, a hung Parliament should keep the upside contained (think back to the Scotland referendum).

Nevertheless, we will give the longs the benefit of the doubt until proven otherwise,

Looking at the 4 hour chart below. if the 1.5000 level is broken, the 1.5026-29 is the next target followed by the 200 bar MA on the 4 hour chart (green line). That level comes in at 1.5078. The 50% of the move down from the Feb 26 high comes in at 1.50923

If the pair can somehow get up to the 200 bar MA/50% retracement level, I would think it would be a great level to sell. As mentioned, the time is ticking to the election, and I would expect more downside potential. With both the 200 bar MA and the 50% at the same area, it makes sense to see sellers at the risk defining area (with stops above - something would be up on a move higher).

If the market cannot work it's way to and through the 1.4989 to 1.5000 area, don't be surprised to see a reversal sooner rather than later.