Following last week’s move to fresh 2014 and 5 year highs, GBP/USD continues to struggle to make gains and combined with very O/B daily studies due for a correction this is of some concern to bulls. In saying that, bears continue to look for a close below $1.6821 to confirm a break of the short term daily channel and ease bullish pressure, whereas a close below the 21-DMA is now needed to end bullish hopes and target the longer term channel base ($1.6665).
The Y101.86 support level confirmed its significance to start the new week with this level having supported on attempts to head lower in Asia, Europe and NY. Initial resistance has now developed on the hourly time frame at Y102.19 but bulls continue to look for a close above Y102.36 to ease the current bearish pressure. Bears are targeting a break of Y101.86 which then sees focus shift to the key Y100.75-101.32 support region with the 200-DMA at Y101.03.
After having flirted with triangle base (Y141.45) yesterday the bounce has been less than convincing and fell short of initial resistance at Y141.89. Bearish pressure is currently dominating with a break lower favoured while the Y141.89 level caps. Bears look for a close below Y140.99 to confirm a break to the downside with immediate focus then shifting to the Y139.96-140.02 region. Bulls need a close above Y141.89 to ease the current bearish pressure.
After having found solid support in the Gbp0.8198-00 region last week the bounce to start the new week remained capped ahead of the 21-DMA. Bulls continue to look for a close above the 21-DMA to confirm an easing of bearish pressure, whereas a close above Gbp0.8257 is needed to hint at further topside and shift immediate focus to the 55 & 100-DMA’s. While Gbp0.8236-57 caps, bears hold out hope for a break lower that then targets the 2014 low.