Can we close above now?
The last time the GBPUSD closed above the 100 day MA was back on June 24th, 2016. The significance of that date? Brexit day of course.
The 100 day MA was up at 1.4350 on that historic Brexit day. 151 days later that 100 day MA is way down to 1.25319 - so it is an easier hurdle to get back above today. Nevertheless, make no mistake about it, the break is a significant hurdle for the bulls.
The question now is "Can the break stick?"
"The market" will decide. I would expect that "the market" will look to lean against that MA line as a risk defining level. Stay above more bullish. Move below...disappointment and the bias turns more bearish. The 100 day MA is the major "line in the sand" for now. It needs to stay above for the buyers.
Drilling down to the 5-minute chart, the correction off the high stalled at the 50% of the day's trading range (see chart below). That level comes in at 1.2548. That is supportive (I like corrections holding 38.2-50%) and keeps the bulls in control. The 100 bar MA on that chart is rising and may also be a barometer intraday at least (see blue line at 1.2559 currently). Watch those levels intraday for bullish/bearish clues ahead of the key 100 day MA (at 1.2532). Stay above and the bulls remain in control.
Targets? The major targets include getting and staying above the 1.2600 level (the high reached 1.2606 today but it did not stay long above that level). The other key targets include the recent swing levels. They include:
- 1.2673. The high from November 2016
- 1.2774. The high from December
- 1.2791. The swing low from July 2016.
