Third test in the last monthThe BOE statement and comments have sent the GBPUSD sharply lower but all things do have a limit in trading (at least temporarily).
The GBPUSD fell to the 100 day MA at 1.30776 (low reached 1.3083) and early buyers leaned against the level.
Over the last month, there were two other times when the price neared the MA line and stalled the fall. The MA is a bit higher now (easier to get through), but traders will still line up where risk can be defined and limited. The price is currently trading at 1.3125 on the bounce.
Well, the pair still sits in the range since early in October. Most of the price action has been above the 1.3109-197 area. We area trading just above that area now. Move back below and we could/should see another run at the 100 day MA. Hold and we could head up to the 1.3152-57 area and then the 38.2% at 1.31747. I would expect sellers though to try and keep a lid on it. So the pair should find the going tough to the upside.
The BOE took the wind out of the sales of the buyers. With Brexit negotiations still troubling and the BOE working very slowly toward tightenings if things go their way the downside seems to be the most vulnerable. However, many a view has failed as a result of a 100 day MA holding and selling (or buying for that matter) drying up. The sellers are in control, but that 100 day MA is a proven hurdle that needs to be busted…