Trades above weekly trend line at 1.3142, and 200 week MA at 1.30909
The GBPUSD took a peek above the 50% retracement at 1.3167 on the weekly chart below and in the process also moved above a trendline dating back to 2014 at 1.3142. The high price for the day reached 1.3180, but the price has since backed off. We currently trade at 1.3148, just above that trend line level I.3142.
Last week, the pair surged and took the price back above its 100 week moving average for the first time since March (currently at 1.30412 -blue line in the chart above) and the 200 week moving average of 1.30909 (first time since April 2018). The high on Friday however, could not extend above the 50% retracement at 1.3167. Buyers took a breather after the sharp run higher.
Technically, staying above the trend line at 1.3142 would be the best case scenario for the bulls looking for more UK pre-election upside momentum.
A move below with more momentum to the downside, however, could see a retest back down toward its 200 week moving average at 1.30909 area. I would expect buyers to lean against that 200 week moving average on a test, but should that be broken, the bias waters become a little more muddy (I. E.. Less bullish).
Of course, the big event this week is the UK election on Thursday. The market will be focused on one thing and one thing alone - do the Tories gain majority that will allow the passage of the Brexit deal. That should be bullish for the GBPUSD (at least temporarily), and move the price away from the weekly moving averages and trendline. The high for 2019 comes in at 1.3380.
If there is a split parliament, I would expect a tumble back lower (with a break of 100 week MA at 1.30412 and 1.3000 the close hurdles to get to and through).
Drilling down to its 100 hour moving average below, the consolidation over the last few days near the highs, has allowed for the 100 hour moving average to started to catch up with the price action (blue line in the chart below). That 100 hour moving average comes in at 1.31025.. With the 200 week moving average at 1.3091, and also the low price from Friday at 1.3104, it makes the 1.3091 to 1.3104 a key support area on more downside momentum.
