GBPUSD Sets a Higher Low After USD Pullback
Hi, and welcome to Thursday’s market update. Have risk majors started to find some support after the USD index broke lower on Wednesday’s session? The USD price remains firm today, but if we see a new break of yesterday’s low, that just might be telling us something about short-term buyer momentum.
We are looking at the GBPUSD today as price has set a new higher low. The GBP is definitely a risky pair to discuss a possible rally, but we feel Monday’s selling could have been an overreaction. Since the plunge, we have seen two firmer sessions and a weaker session so far today.
Could we see a new move back to test 1.1250? We feel as long as 1.0678 holds, this could be a possibility. But we need to see a break and hold above 1.0895 to show that buyers hold short-term control. On top of that, the USD will also play a role. We would like to see today’s rally fail and sellers hit new weekly lows to keep feeding buyer momentum. Higher lows are a solid pattern that can show a new reversal, but we need to see the break higher to confirm it.
As mentioned above, a new close below 1.0670 could be seen as a warning that sellers are back in control.
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