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 lows
- Breaking and extending above the 200 hour moving average added to the bullishness
- Breaking and extending away from the 100 day moving average (at 1.3359), and
- Breaking 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..
