The GBPUSD has rallied strongly today. The price move higher was helped by some favorable economic data (index of services was much stronger) which helped lead to a sharp spike higher. The correction off of that high of that last leg has recently breached below the 38.2% retracement level at the 1.6382 level. The 100 bar MA on the 5 minute chart is the next target on the downside. That level comes in at the 1.6375 level. A move below that MA level will be needed to give the bears confidence that the correction of the move can continue.
If the price breaks the 100 bar MA in the chart above, the next target would look toward the 1.6360 level . This is the 38.2% of the days range. A move below this level gives bears more and more confidence. Not being able to get through increases the bulls stand.
Looking at the hourly chart the price broke above an extended bull flag started on Thursdays surge higher. Yesterday, the price tried to break higher on three separate occassions. Each time it failed. Today the price broke above and the momentum continued. This was a bullish move.
