GBP/USD moves back above its 100-hour moving average
The major currencies bloc - except the yen - is starting to see a familiar pattern in trading against the greenback today as all dollar pairs have breached key near-term levels to sit in between both key hourly moving averages.
This comes as the dollar momentum wanes after the Fed announcement yesterday and cable is no different, as price now moves back above the 100-hour MA (red line) after failing to breach the level last week.
That means the near-term bias in cable is now more neutral as buyers extend the bounce towards 1.1700 currently, with minor resistance around 1.1715-39.
Despite things looking better for buyers (dollar bears), it is still too early to say that we're on track for a protracted bounce. As mentioned earlier, confirmation from Wall Street is going to be key to any sustainable run that we're seeing today.
But also, there are still so many moving parts to consider in the market.
For one, the pound is for the most part ignoring the dismal UK PMI data earlier. But should it? Just take note that the data already looks this bad even before any of the UK lockdown measures were introduced. There's some food for thought.
And with the world still in lockdown mode and possibly seeing longer extensions, for how long can the good mood be sustained? A thing to remember is that the sharpest of bounces tend to come during a bear market, but that doesn't mean that we have hit rock bottom.
Is this the case today? We can only wait and see. One day doesn't make a trend.
But at least for the case of cable buyers, the shift in the near-term technical picture is encouraging for starters but more work needs to be done.
