GBP/USD price action is trapped in between the key hourly moving averages
The return of dollar demand over the past few sessions saw price hit a low of 1.2438 in overnight trading, leaning on minor support around 1.2442 before retracing higher as dollar gains eased slightly.
The move higher broke back above 1.2500 but ran into the 61.8 retracement level of the swing move lower yesterday @ 1.2567 before backing off again.
Notably, price action fell back below its 100-hour MA (red line) in trading today and has been caught sitting in between both key hourly moving averages until now.
So far, the downside push on the day is limited by support around the 38.2 retracement level highlighted above @ 1.2464. Meanwhile, topside price action is still falling short of firmly breaking back above 1.2500 and the 100-hour MA @ 1.2523.
The dollar is still keeping firmer on the session so far but the mood has been tempered a little by gains in risk to start European trading. If anything, it shows the market is having mixed feelings about the recent moves this week.
However, eventually investors will have to settle on a narrative and put an end to the debate on 'who has it right?', dollar trades or the move in equities?
The technical levels in cable will help to define and limit the risks associated with that argument, and also help to identify the conviction in the market.
Right now, price action is trapped between the key hourly moving averages so the near-term bias is more neutral. As such, the next key directional break in the pair will come from a break on either side of those key hourly moving averages.
The 100-hour MA rests at 1.2523 currently while the 200-hour MA (blue line) is at 1.2440 so those will be the two key levels to watch at the moment. The 1.2438-42 levels highlighted above will also add to downside support in the near-term so watch out for that.
