GBP/USD extends gains, looks towards test of 100-day moving average

Technical Analysis

Author: Justin Low | gbpusd

GBP/USD touches a high of 1.3018 on the session

Cable is looking to hold above the 1.3000 handle after some struggles earlier in the day and the next key level to eye for in the session ahead will be the 100-day MA (red line) @ 1.3042. The dollar is once again struggling in the session falling to new lows against the euro, pound, and loonie.

As a result, cable is back up above 1.3000 and buyers will be looking towards testing the key resistance level above. Hold a break above that and the bearish bias/momentum in the pair will turn more neutral instead.

It's all about the dollar's struggles once again in the new day and after unrelenting selling pressure, flows continue to work against the greenback ahead of the US jobs report. If payrolls and wages fail to light up the sky, I reckon we will see a continuation of selling in the dollar during US trading.

Should that happen, look out for the 100-day MA in cable. Much like the aussie and kiwi, the pair is proving to be another squeeze. And a break of that will surely add more conviction for shorts to rush to the exits. However, be wary of Brexit headlines that could potentially pour cold water to the hot run yesterday.

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