After having found support at $1.6766 GBP/USD dipped to fresh 2 month lows Tuesday before bouncing back towards the $1.6828 initial resistance. Layers of resistance remain in the $1.6828-1.6894 region with bulls continuing to look for a close above $1.6894 to confirm an easing of bearish pressure. Daily studies remain O/S and appear the key concern at present. Bears now need to see a close below the $1.6795 initial support to reconfirm bearish pressure.
The recovery from Friday’s low continues to struggle at the 200-DMA (Y102.33). Bulls continue to look for a close back above Y102.45 to confirm a break of the 200-DMA and an easing of bearish pressure. Focus then shifts to the Y102.94-10 region. While the Y102.33-45 region caps bears remain focused on the Y101.07-32 support region with the key 55-WMA noted at Y101.27. Bears continue to look for a weekly close below the 55-WMA to add weight to the bearish case
Lower daily highs and continued failure ahead of the 21-DMA favour further downside with layers of resistance noted in the Y137.00-41 region. Bulls continue to look for a close above the falling channel top to confirm an easing of bearish pressure and a close above the 55-DMA (Y138.03) to end bearish hopes and shift overall focus back to the Y139.28-75 region where 100 & 200-DMAs are located. While Y137.41 caps bears remain focused on the Y133.91-134.10 region.
The move to fresh 2 month highs last week has lacked follow through with the EUR/GBP struggling at the 55-DMA (Gbp0.7981) and the Bollinger top (Gbp0.7986). As a result the pair has headed lower with the close below Gbp0.7962 easing bullish pressure and seeing focus return to Gbp0.7915-30. Bears look for a close below Gbp0.7915 to confirm a break of the 21-DMA and shift immediate focus to 2014 lows and the Bollinger band base.