Back BOE day low area
Last week on Thursday, the BOE and Governor Carney gave a more dovish view to the economy and monetary policy. The price of the GBPUSD fell to 1.5204 on the day.
The next day the price continued lower - helped later in the day by a stronger than expected US employment report. The low reached the lowest level for the pair going back to April 24. That low came in at 1.50263.
Since Friday, the pair has seen a more upward bias. Today, after a dip lower on the mixed employment report (wages stayed at 3.0% vs 3.2% est.), the pair has continued the move higher. The price just moved above the 1.5200 area and the 38.2% retracement of the move down from the November high reached on November 2. That level comes in at 1.52052
The GBPUSD now sits in between the 100 hour moving average at the 1.5131 level and the 200 hour moving average currently at 1.52697. The midpoint is conveniently at 1.5200. Traders should see the breaching of the 1.5200 level as a bullish signal. The high on Friday (Nov 6th) came in at 1.52185. The high today printed 1.52194 -nearly equal to that high. I would expect 1.5200 to try and hold support with 1.5219 the next break point. Above that 1.5241 (low from October 29) and then 1.5260 (50%) and the 200 hour MA at 1.52697 as the next targets.
Of course, the rally can also fizzle. Liquidity conditions remain light and market can be influenced by little nuances. But for the time being, the buyers remain in control.