- The GBPUSD has been supported first by inflation worries, then by the selling of the dollar in NY.
- The move higher breached the 1.5989-1.6000 level and looks toward the high for the month/year at the 1.6061 (see daily chart above).
- The GBPUSD has only had one close above the 1.5989 level since February 1st. Staying and closing above this level is bullish on the daily chart.
- The range for the day is a healthy 148 pips. This is higher than the 104 pip average over the last 20 trading days. This may limit the upside for today. So may see some selling against the high with stops above,
- The month range for the GBPUSD is only 257 pips. This is the most narrow trading range sine May 2002. Two days ago, the bottom of the month’s trading range was being tested. That move failed when the price moved back above the 200 day MA (green line in the chart above). Now at the highs. I am not one to expect 9 year records. So an extension is possible.
The move has been via two legs. One in London. One in the the NY sesssion. Looking at the 5 minute chart below, trends higher will tend to hold support at the 38.2%. The first leg higher had 38.2% retracement support at the 1.5955 level. The low correction came in at 1.59616. The second leg higher has the 38.2% corrective support at the 1.60104 level. Traders will be watching for support near this level. If the price falls below this level, there may be additional corrective pressure
Bulls looking for an extension of the narrow months trading range would look for support to hold at the 1.5989-1.6000 level. If support holds above this level a test of the high can be expected. A break above the high targets the November high at 1.6128 and the October high at 1.6164
