The GBPUSD bottomed this week on Tuesday near 1.32594. The Bank of England on Wednesday cut rates by 25 basis points but it was a hawkish cut as the MPC vote was 5– 4, not as high as the 7-2 expected.
The price moved up to the 100 day moving average on Wednesday. On Thursday, the price extended higher and away from that moving average and today, a new high was made just short of that 50% midpoint target. The current price is trading just off the high at 1.3446, setting up next week for traders to either push lower against the 50% midpoint, or extended above and look to continue the move higher.
On the downside, the 38.2% retracement of the move down from the July 1 high was broken earlier this week at 1.3386. That – and the 100 day moving average at 1.3359 – will be support on a corrective move lower.
On the topside, a break above the 50% retracement level with momentum would have traders looking four the 61.8 at 1.3540 followed by the high price from July 23 near 1.3588.
Overall, the
Basing against the 100-hour moving average was a positive development at the lowsBreaking and extending above the 200 hour moving average added to the bullishnessBreaking and extending away from the 100 day moving average (at 1.3359), andBreaking above the 38.2% retracement at 1.33865 added even more to the upside confidence.
However, getting above the 50% is still a challenge for the buyers that could stall the rise early next week. Be aware be prepared..
This article was written by Greg Michalowski at investinglive.com.