GBPUSD extends back up toward 200 day MA

Like the EURUSD (see post here), the GBPUSD moved sharply higher on Tuesday helped by the weaker CPI data. That took the pair above its 200-day moving average currently at 1.2443, and 38.2% of the move down from the July high at 1.2458. The high price of 1.2505 got the GBPUSD price within 8/9 pips of the falling 100-day moving average target (blue step line in the chart above). Sellers leaned against the key MA target.

The price of the GBPUSD rotated lower on Wednesday and into Thursday helped by lower UK CPI data, but the low stalled ahead of a modest swing level target at 1.2368 (see red numbered circles – the low price reached 1.2375).

Since then the price has been trading up and down. The high price on Thursday was able to move above the 200-day moving average but stalled just ahead of the 38.2% retracement of the move down from the July high at 1.2458 (high reached 1.2455). The low price today reached 1.2375 today (short of the 1.23684 swing level – see red numbered circles).

What next?

The price has moved up in early US trading but fell short of the 200-hour MA. Ultimately, if the buyers are to take more control, they need to get and stay above the 200-day MA. Those buyers also need to get and stay above the 38.2% retracement as well at 1.2458.

If that can be done, buyers can refocus on the falling 100-day MA at 1.25074.

For sellers, leaning against the 200-day MA keeps the sellers happy. A move above and you have to be worried that the buyers are winning (with the 38.2% a more conservative stop). If the sellers are to feel better, get and stay below 1.23684. That opens the door to 1.2336.

For the trading week, the GBPUSD is higher by 1.55% as a result of the relief from the US CPI data. Of note – off the weekly chart – the move higher has taken the price above it’s 100-week moving average at 1.2398 this week. That is worth something technically for the buyers, but with the price currently at 1.2417 – and off its highs for the week of 1.2505 and below the 200 day MA and 38.2% – there might be some nervousness that the price can hold that level.

This article was written by Greg Michalowski at www.forexlive.com. Source