Pounds attempt to takeout the floor of its nearly monthly long consolidation proved short lived with GBPUSD recouping its losses for the day in US trading. With an FOMC meeting tomorrow and a BoE rate decision on the 20th we are skeptical about prospects for any change in the equilibrium levels. Note however that Fed Economic Projections underscore persistent inflation and robust jobs markets, this will be a good excuse to takeoit the daily consolidation floor around the 1.26880 area.
Resistance
- 1.28175 – Daily Consolidation Resistance
- 1.27631 – Intraday Consolidation Low
- 1.27371 – High for Yesterday
Support
- 1.26880 – Yesterday’s Low
- 1.26438 – Intraday Consolidation Low
- 1.26060 – 50D Moving Average
The bounce off month long consolidation lows and consequent daily hammer puts GBPUSD in a very interesting position. Were we preceeded by a long bear market this would have been a nice bullish reversal. For now what we have is a daily consolidation support holding on a test. Looking into the lower time frames we have an overbought 4H stochastic and thus far a consolidation below 1.27371, yesterday’s high.
