The pound is where the action is this morning in both cable and EUR/GBP.
Reuters heat map 17 02 2013
I suspect we’re likely to see the two pairs cool off as we get further into the day but you just never know.
We broke above the double week Apr/May 2011 highs at 1.6747and the next target is the Nov 2010 high at 1.6877 and then the August 2009 high at 1.7042. Ahead of that is the 100 mma at 1.6955.
GBP/USD monthly chart
If we clear the 2009 highs then it’s pretty much open sky through 1.70 until the 50 fib of the 2007/2009 swing down at 1.7331. After that we’re in the clouds. You’ll also note that 1.7042 high was also the 2005 low so it’s looking a fairly strong long term level.
GBP/USD monthly chart
It’s looking like 1.68 has pushed the envelope just that little bit too far and we’re sliding back towards 1.67. Just glancing at the 15 chart I’d expect to see some mild resistance here at 1.6720 and then 1.6690/6700.
Unless we get something on the wires I’d expect the bulls to look to defend 1.67 but if it goes we could see some short term longs taking profit. It just remains to be seen where the buyers will becoming in on the dip and I’d be looking at 1.6640/50 as a first point on entry.