GBP/USD touches a high of 1.2948 on the day
Very much a similar move to the EUR/USD in terms of choppiness at the start of the session as the pair fell to a low of 1.2914 on the day before recovering to touch a high of 1.2948. Buyers are continuing to defend the near-term bullish bias as price continues to stay above the 200-hour MA (blue line) @ 1.2921. There’s also additional support from the 50.0 retracement level @ 1.2914 that is helping to provide another line of defence for buyers.
However, price continues to struggle for upside momentum in spite of that as there is still potentially Brexit risks and the trade rhetoric between US and China that could help to spur risk off moves and flows into the dollar.
But for now, buyers are showing strong determination and that is something worth taking note of. The same can even be seen in the 4-hourly chart:
Buyers are also keeping price above the 200-bar MA (blue line) here @ 1.2918 and that’s another good sign for bullish momentum. But currently, the broken upwards trendline is acting as a key resistance level and one that buyers have been struggling to get above recently. That level now sits at around 1.2975.
So, that will be a key level for buyers to break above for a further run to the upside. The thing about the trading the pound now is that there is a sort of double-edged sword. A good Brexit headline can easily spur bids in the pound and take it higher seeing as how buyers are looking poised. But at the same time, negative headlines from trade or from Brexit can also send the pair back down the other way.
But right now, bias and near-term momentum is favouring buyers and risk can be defined and limited by the key levels mentioned above. However, just be wary of headline risks. That is something out of every trader’s control really.
Oh, not to mention that we’ll also have the US non-farm payrolls to come later at 1230 GMT for added risk events on the day.