The GBPUSD surged on Friday, helped by the lower nonfarm payroll data in the US. The price rise took the price to the June high at 1.28478. The high price on Friday reached 1.28487 – a pip ahead of the June high. The GBPUSD price backed off into the close on Friday.
In trading in the Asian session today, the buyers turn to sellers. The last few hours have seen increased momentum to the downside in the pair as traders retrace the Friday gains.
The pair is now looking to test its rising 100-hour moving average of 1.2744. A swing area between 1.2738 and 1.2759 is also “in the way”. I would expect that risk-focused buyers might enter and lean against the area with a stop on a break below.
On a break below, the 200-hour moving average at 1.27031 would be the next target, followed by a swing area just below that area between 1.26815 and 1.26988.
Conversely, if the support does indeed hold, moving back above the Thursday high at 1.27803 would give the dip buyers some comfort (staying above that level would open the door for more upside potential).
This article was written by Greg Michalowski at www.forexlive.com. Source