Bounced off the 50% retracement yesterday
The GBPUSD is trading at new session highs and tests topside trend line resistance at the 1.5567 level (see chart below). A move above will next look toward the 1.55839 level (38.2% of the move down from the Friday high). The pair was supported by comments in the BOE meeting minutes that the committee feels inflation will pick up "notably" toward the end of the year.
The 38.2% of the move down from the July 2014 high (see chart below), comes in at 1.5570. The high just peaked at 1.5567). The key 200 day MA comes in at the 1.5599 level (round to 1.5600) today. The pair squeeze above the 200 day moving average - helped by the UK election results and weaker US data. The fall back below the MA yesterday after the better US housing data. The move has traders thinking the high may be set and the bears are back in full control. That may be the case if the 200 day holds resistance today. This makes the 1.5600 level a key "line in the sand" (RISK) level for shorts. Stay below and rotation lower can continue. Move above and the bets are off.
On the downside, the low yesterday held the 50% of the move up from the May low at 1.5450 (the low reached 1.5446 before bouncing). If the 200 day MA is a key level on the topside the 50% and the low yesterday makes that area (at 1.5446-1.5450) a key level on the downside. Closer, watch the 1.5530-1.5535 level for intraday support.