Forex technical analysis. EURGBP bounce sends EURUSD squeezing higher with it.

Extends off the 200 hour MA

The EURGBP has seen a bounce off the 200 hour MA for the 2nd time today (see breen line in the chart below). That bounce has helped send the EURUSD higher with it.

The EURGBP fell below that 200 hour MA yesterday and failed. In the early hours of the trading day today, the price moved below the MA again and failed. This time the failure occurred after a few hours (see red highlighted areas in the chart above).

Perhaps as a result of the two successive failed breaks, in the London session today, tests of the MA line were met with more buying.

The 100 hour MA (blue line in the chart above) held resistance on the first look earlier today. That MA comes in at 0.86434 currently. Yesterday, the moving average was also tested and held. That line becomes a key target on the topside for the buyers.

So with support at the 200 hour MA and resistance at the 100 hour MA traders have the levels to trade against. They also have the levels to eye for the next break and run. With support last holding the buyers are looking stronger - with resistance ahead. Be aware....

Meanwhile over in the EURUSD, the pair extended lower earlier in the NY session (see chart below). That move took the price below the 200 hour MA and the 50% retracement. However, that break failed and with the help of the rebound in the EURGBP, we are now seeing a reversal and extension to the upside for the day. The prior high for the day came in at 1.1235. The high from yesterday was 1.12363. The price just squeezed to 1.12376. The MAs below (at 1.1228 ) are now close support in the up and down market.

Overall, things seem to be heating up a bit in the pair. Nevertheless, we are still sitting on an edge. Earlier that edge was more to the downside. after falling below the 200 hour MA. Now we sit on an edge on the topside.

The pair remains in a narrow trading range for the day at 41 pips. The average is 67 currently. That suggests if the price is able to get above the higher edge, the potential exists for a further move higher. Key test. Key edge.