GBPUSD boosted by PMI Services today. Bias is positive for the pair
The GBPUSD moved higher today on the back of better than expected PMI Services data. The low for the pair came in at 1.6400 in the quiet range bound Far East session. In the London session the price stalled first at the 100 hour MA before breaking through at the 1.6435 level. The break was also confirmed by the technical break of the ceiling on the 5 minute chart as well at that same level (see chart below).
The break led to high of 1,6543 so far today. The high last week extended up to 1.6603. The high on Friday reached 1.6578. These levels are obvious targets for the pair. On the downside, there is support against the 100 bar MA on the 5 minute chart at the 1.6488 level currently and moving higher (watch this moving average). This level is also the 38.2% retracement of the days range. Look for value buyers against these levels.
The BOE will meet tomorrow and decide on the Quantitative Easing desires at that time. THe expectations are that they increase the amount by 50MM pounds to 225M from 175M. This seems to be expected by the market and priced in. However, as always the technicals will dictate the bias. The 5 minute and hourly charts are both positive. Keep an eye on the key technical levels outlined above.
A reminder. The 100 day MA is 1.6362. The price is above this key level so the longer term bias remains positive for the pair. In 11 of the last 13 days, the price has traded above and below this moving average as the market consolidates. Today if the price can remain above the level, this will be only the 3rd day in the last 15 that the price has not touched that line. This is positive from a longer term perspective. Generally speaking, the price tends to want to move away from the 100 day moving average after a while.
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