Pound flies after the services PMI. How long can it last?
The biggest component of UK GDP has mostly suffered in Q1 but the March number has done a lot to even that out.
GBPUSD has rushed up to 1.2490 on much better than expected number but the move as a whole isn't anything meaningful. There's going to be no shorts quaking in their boots on this one number that still leaves us 1.2 ticks lower than we finished 2016 with.
Last week's CFTC data didn't include positions traded after the Art50 trigger, and given the price action since then, it's doubtful that shorts have lessened further. We're only odd 100 pips higher than the Art50 low, and most of that is on today's PMI.
The 55 H4ma caught the rally, and being only a few pips from the 1.25 big figure, it's also hit that protection too.
GBPUSD H4 chart
Despite the repeated tests, I still like the support down around 1.2420 and this will be strengthened further after this rally. As above, the 100 H4 sits at 1.2421, and we have the 55 dma at 1.2424 and 100 dma just under at 1.2413. There's old support from 1.2408 down to 1.2400, and then at 1.2375/80.
Jobbing longs from 1.2420/25 looks the way to go for now, while taking profit and reversing into 1.2500/15/30 looks good on the other side.
