BOE Carney/Weak CBI reported sales sends the pair lower. US GDP as expected
The GBPUSD has been moving lower helped by comments from BOE Carney (et. al.) as he testified to UK treasury committee. The CBI reported sales for the month of November were also weak at 7 vs 19 prior. The estimate was 25, so that surprised to the downside in a big way.
The GBPUSD has been able to push below the 1.5106 and 1.50837 swing lows from May and August/September (see daily chart above - blue circles). Earlier this month, the pair pushed below the same levels and made a new 6+ month low at the 1.5026 level before bouncing higher. That corrective high stalled right before the 200 day MA last Thursday (November 19). The 200 day came in at 1.5339. The high that day reached 1.5335. Since that time, the pair has shed 267 pips as the price trended lower.
The move below the 1.5083 level should increase the bearishness for the pair, but the US GDP - although as expected at 2.1% - did not impress and push the pair lower. So the price has risen back up to test that key 1.5083 level (see 5 minute chart below). Stay below and the sellers remain in control. Move above and the pair may start to look toward a retest of the 1.5106. The 38.2% -50% ("Correction Zone") of the day's trading range comes in at 1.5100-11. That "Correction Zone"along with the low off the daily, increases that areas importance.
On the downside (i.e. stay below 1.5083), there really is not a lot of support. As mentioned, earlier in the month the push below the 1.5083 level took the price to a low of 1.5026. This was close to the lower trend line support connecting the recent lows (see daily chart above). That lower trend line comes in at 1.5006 currently which is awfully close to the natural support level of 1.5000 which should be a tough nut to crack on the first look going forward.
Bears in control, but market taking a breather...
PS EURGBP continues to move higher with 0.7088 as the next upside target (currently at 0.7074).
