GBP/USD moves towards a test of the 100-hour moving average again
The pair touches a high of 1.2688 on the session and is closing in on a test of the 100-hour MA (red line) @ 1.2691. Buyers managed to crack that level earlier this week after May delivered her WAB but failed to hold on to any momentum and fell to fresh four-month lows after.
Right now, the upside move comes about as the dollar is holding weaker since overnight trading and is extending its decline in early trades. If buyers manage a break above the 100-hour MA, the near-term bias will then turn more neutral.
That will represent a significant change for cable sentiment after one-way traffic over the last three weeks. That said, I’d look towards a break of the near-term trendline resistance @ 1.2714 and the 200-hour MA (blue line) @ 1.2765 for further confirmation of a return back to the upside in the pair.
Otherwise, with the pound still shaky amid UK political worries, there is still reason for sellers to hang on for now. However, with the dollar itself having its own problems currently, it’s best to reevaluate and perhaps look for opportunities in other pairs to take advantage of the weaker pound sentiment instead of cable.