With the US employment claims moving higher, building permits and housing starts tumbling, Philadelphia Fed index shifting to negative, the USD has shifted to the downside. US yields are back near unchanged (up about 1 basis point).
Looking at the GBPUSD, it is now moved back above its 100 hour moving average at 1.21553 with momentum. Sellers turn to buyers on the break. The price also has extended above the highs from yesterday and Tuesday, and moved above the 38.2% retracement of the move down from the May 27 high at 1.22131. Watch for close support between 1.22038 and 1.22131. Stay above that area would give the buyers the go ahead 2 push higher
Upside targets now include 1.2260 followed by a swing area between 1.2288 and 1.2302. In between that is the 50% midpoint of the move down from the May 27 high at 1.22995 (call it 1.2300).
The Bank of England raise rates by 25 basis points earlier and the price declined after the news, but focus now on the selling the dollar has helped to push currency back to the upside. I don't know if that is good or bad for the UK economy. At least they should be getting a onslaught of pent-up travelers given the pounds weakness.
Looking at the weekly chart, the move to the lows this week took the price to the lowest level since March 2020. The price also moved into a swing area between 1.1840 and 1.20729 (swing lows from 2016, 2017, and 2019). The March 2020 Covid induced plunge to 1.14083 is another target that could not be breached. The move higher today has taken the price back above that swing area. Stay above 1.20729 will also now be eyed as a medium term risk target to stay above IF the bottom is in place. The low after the BOE decision breached that level but moved back above (low reached 1.20398).
