GBPUSD also pushed higher. Kraft/ Cadbury M & A activity may also be helping
The Kraft hostile bid for UK’s Cadbury seems to be part of a influence for higher GBPUSD. The 1.6636 was the double top from last Thursday and Friday. The market opened up above this level, retraced below the value where the price tested the 100 bar MA at the 1.6608 level (low was 1.6616) and the price moved steadily higher for the rest of the day.
The price is currently testing the 100 bar MA at the 1.6775 level. This is the first move below the moving average today. However just below at the 1.6759 level is trendline support. A break below this level should solicit additonal selling toward the 1.6718 level which is the 38.2% of the move up from Friday’s low and the 200 hour moving average. This should be good support.
Moves above the 1.6600 level has been difficult in the past for the GBPUSD. The break higher has caught a lot of traders off guard and this helps contribute to the short covering bid today. Look for supporting bids as traders cover some of the risk.
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