GBP/USD moves up to a high of 1.2943 on the day
The greenback has moved a little lower across the board and that sees cable rise up to session highs on the day. Price moved lower earlier to test the 100-hour MA (red line) but the level held and now it is moving back above the 200-hour MA (blue line) @ 1.2928. Stay above, and near-term bias turns more bullish.
At the same time, EUR/USD has also pared earlier losses and is trading around 1.1560 levels while NZD/USD is also flat on the day but still trades within a 25 pips range. Meanwhile, USD/CAD has also backed off near the 1.3200 level and now trades at 1.3178.
It’s a bit of a give and take start to the day so far with very little market catalysts to act upon. The dollar still has some tailwind from last Friday’s jobs report but it hasn’t translated into anything meaningful in terms of a December rate hike as of yet. A December rate hike remains about 2/3 priced in and for the dollar to get any further support there it would require more solid data or signals from the Fed.
I reckon there needs to be more from the latter in order to spur further odds of a rate hike in any case.
For now though, the pound is enjoying a decent start to the week with the lack of any meaningful Brexit rhetoric really making headlines. And as evident from last week’s two spikes higher, buyers are looking for any good news to get back into the game.
And the fact that price continues to trade above the 100-hour MA shows that sellers have been unable to wrestle back near-term control in the pair. That’s a positive sign for a potential upside move. But again, it’s all about Brexit headlines when it comes to the pound this month. At the moment, technical bias is siding with buyers in my view but just be wary that things can easily change in an instant when it comes to headline trading.
Resistance is seen around 1.2950 followed by the 1.2980 level before offers at 1.3000 comes into play. Meanwhile, support remains at the 100-hour MA @ 1.2902 followed by the 38.2 retracement level @ 1.2884 and then swing region support around 1.2870 is next.