GBPUSD is testing support. 1.6742 will be watched on the topside now.
The GBPUSD has been tracking lower in NY after the sharp rise in the Far East/early London session. The price has now moved below the 200 bar MA at the 1.6742 level. It has dipped below the 38.2% retracement support/target at the 1.6718 level but has slowed the decline.
There is additional support down below at the 1.6693 level which was the high from October 23rd.
The GBPUSD has been stepping higher after breaking above the 100 day MA last week at the 1.6362 area. As outlined in our commentary at that time, the price consolidated at the moving average with 11 of 13 days at one point having highs and lows through the key moving average level 9at 1.6362. This suggested the pair was non trending. Non trending transitioned into trending and the 5 day rally began.
The subsequent 5-day surge has seen the price move from a low of 1.6260, through the 100 day MA at 1.6362 and up to the high today of 1.6842. The move back below the September 11th high of 1.6741 level (also corresponding with the 200 bar moving average on the 5 minute chart (see green line in the chart above), will be watched today on the correction. There may be some profit taking against the level now as the bullish bias fades from this mornings trade. Watch the level closely but expect sellers against stops above.
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