The 200 hour MA was broken on Friday and again Monday, but momentum could not be sustained
The GBPUSD moved up, then down in trading today and in the process retested the 200 hour MA and 50% retracement at 1.3094-98 area. The low reached 1.3101 and bounced. We currently trade at 1.31345.
The 200 hour MA was tested and broken on Friday and again yesterday only to recover back above each time. Traders may be becoming more wise to the price action (i.e. the failures) and that has led to the bounce. The EURGBP may also be an influence as it has reversed lower over the last hour or so of trading (it certainly is contributing).
The 100 hour MA above at 1.31519 is a topside resistance target. That is another MA that has seen above and below action recently. Yesterday, the price shot higher and spent most of the time above the line. Today there was a similar dip below, but after a sharp run higher that stalled, traders probed the downside instead.
It seems the market is feeling out what it wants to do next. Politics has been toned down a bit. Traders are trying to figure out what's next.
Byron Wien (87 years young and going strong) is out with his annual surprises for 2020 and he sees a stronger UK/stronger GBP:
Having secured a workable Brexit deal, the United Kingdom turns out to be the winner in its divorce from the European Union. The equity market rises and the pound rallies. The U.K. benefits from a long transition period and growth exceeds 2% as foreign direct investment resumes now that the outlook is clarified. The EU economy remains soft, and European markets other than the UK underperform the US and Asia.
Do you agree with good ole Byron?
You can see his prognostications for 2020 by clicking here.
