GBPUSD: Support area holding so far
GBPUSD: Testing good support around 1.4350 – 75 where the market has turned on many occasions since the Dec 31st low. A hold of this would suggest a test of resistance levels at 1.4982/6 while a breach would indicate further ST weakness towards 1.4153 and possibly 1.4052. Overall out bullish bias is still in place though we have to respect the size of the correction down in the ST. Over time we expect resistance levels to be tested.
EURGBP – Good correction up but bearish setup still in place
EURGBP: While we cannot ignore the bullish reversal pattern posted yesterday, there is good resistance in the 0.9071 – 0.9085 area where the previous highs from last week converge with the 55 day moving average. The pair has failed to close back above the 55 dma since it was breached on 30th Jan. While the market may be at risk of a ST bounce, we continue to believe that the dominant trend is down and that the 200 day moving average at 0.8274 should be tested (Note again the aggressive bearish weekly reversal posted two weeks ago – see insert). Additional resistance comes in at 0.9130.
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