Buyers and sellers are now battling between moving averages. Be aware
The EURGBP opened the New York session near session highs. At the level, the pair was testing the 38.2% retracement of the move down from the April 21 high to the low price reached just yesterday. That level came in at 0.87547. The high price for the day reached 0.87541.
Sellers leaned against the technical level and when stocks started to rebound in the US on the Gilead news, sellers in the US dollars pushed the GBP higher (the GBP was the weakest of the majors), and with it the EURGBP.
The corrective move to the downside has now reached the 100 hour moving average at 0.87232 and the 100 day moving average just above that level at 0.87278. Buyers of the last 3 hours have come in, and stalled the price against that level. Note also that the high price from yesterday was between those levels at 0.87242.
As a result, the technical waters are more muddy.
For dip buyers, there is reason to buy against the 100 hour moving average and high price from yesterday at 0.87232. If the price can stay above that level then we should see a rotation back up toward the 200 hour moving average at 0.87394 and then see what happens from there (i.e if the price can move above that level).
Alternatively, traders can look at the modest corrective move to the 38.2% retracement today as simply a plain-vanilla correction, and instead look for a rotation back lower. Risk for those traders would be a move back above the 200 hour moving average at 0.87394.
Buyers and sellers are battling it out between technical levels and await the next shove.
