Last week the GBPUSD ended the week higher. The EURGBP moved lower. The GBP was the stronger currency. Today those fortunes were reversed.
For the GBPUSD the price has trended nicely to the downside. The pair fell below the 100 bar MA and 200 bar MA on the 5 minute chart, then the 38.2% of the move up on Friday and trend line support and the steady trend like move ensued. On the way, the price fell below the 200 and 100 hour MAs before bottoming near bottom side trend line support at currently at the 1.5682 level (low reached 1.5676). For this morning the 1.56956 -1.57016 is the 38.2-50% of the last trend leg down in the trend move lower. If the price can stay below this correction zone, the sellers remain in firm control of the market with a break of the low looking toward key trend line support on the weekly chart at the 1.5633.
Last week, the price tested this trend line and held nicely. A break this week should lead to further liquidation.
For the EURGBP, the price has rebounded back toward the 50% of the move up from the January 22nd low to the high on February 1. That level comes in at 0.85381. Just above that the broken double bottom from Jan 31 adn February 5th comes in at 0.8551. WIth the price at 0.8540, it is between these resistance areas. This should slow the rise for the time being. A break above however, and the momentum higher should continue.
Traders should also be aware of the 200 week moving average this week. That level was broken to the upside two weeks ago. Last week the price and moved below the level again. Today, the price has once again moved above this line at the 0.8525 level. Watch this level on the downside today for more selling clues.