Squeaks to a new low and quickly rebounds
The GBPUSD dipped below the low from from Monday at the 1.47284 level. The price reached to 1.4725, but quickly bounced above the 1.4740 1.4750 1.4770 level - suggesting a reluctance to go too low before the news over the next day or so. In addition to the Fed decision, the UK will release jobs data and the details of the final budget during tomorrow's trading session.
Whereas the EURUSD trade of the day occurred when the price moved above the 100 hour MA in the early London trading session, the best trade of the day for the GBPUSD occurred in the early London session> However, in contrast to the EURUSD, the trade was a sell. Specifically, the level traders leaned against was the 1.4846 lows from March 12 and March 13. Yesterday, the price squeezed above this ceiling but quickly retreated.
Another area of significant for the pair comes between 1.48119 and 1.48302 (see chart below). Looking at the weekly these levels correspond with the low prices from July 2013 and March 2013, respectively. The hourly chart shows initial support against the 1.48119 level in Far East trading. However, when the pair fell below in the London morning session, the correction stayed below this level (high only reached 1.4806). Keep this area in mind in your trading going forward. Stay below = more bearish.
With the bounce off the week lows at 1.4725/28 and the resistance above at 1.4811-30 and then 1.4846, the bookends are set for the action off the news (or so it seems). I expect the market to respect these levels but yesterday we saw more of a squeeze higher - today the opposite. So expect up and down action to be a distinct possibility as traders await more direction tomorrow.
PS ....The EURGBP is also bullying the pair...
