Like the USDJPY, the Michigan consumer sentiment data and especially the 1 year inflation expectation spike (to 4.6% from 3.8%), has been a catalyst to push the USD higher, and the GBPUSD lower.
IN the process a key support target at the converged 100 and 200 hour moving averages near 1.2457 has been broken (see blue and green lines on the chart above). The price has entered into a swing area between 1.2420 and 1.24447 . The low price has reached 1.2436.
What next?
The break of the two moving averages now shifts the short term bias lower and sets the MA as short term resistance. Stay below and more downside probing can be anticipated. Move below 1.24208, and traders will start to look toward the 1.2400 level. The low price from Wednesday's trade fell just below that level to 1.23974 before rebounding back to the upside. Key target now on more downside momentum and then traders can reassess.
