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GBPUSD falls below the 100/200 hour moving averages
The GBPUSD is dipping back below the converged 100/2000 hour MAs at 1.23716.
The price has been skimming along those moving averages in trading today only to bounce back higher. The break in the current bar is showing more downside momentum.
On the downside the prices approaching a trend line at 1.2351. Below that and the lows from Thursday and Friday cut across near 1.2342. Each represent the next downside targets.
Move below those levels should open up the door for further downside momentum as traders become more comfortable with the bias shift in the downward direction.
Taking a broader look at the daily chart below, the index high this month reached 1.2447 last Monday. That was just a PIP or two higher than the swing high from December at 1.24458. The inability to move above that level has helped to put a lid on the pair.
On the downside, traders will be watching the 50% midpoint of the range since the early June 2021 high. That level comes in at the natural support at 1.2300. That level comes between a swing area from 1.2278 up to 1.2343.
GBPUSD has a defined ceiling near 1.2347 area
This week both the Fed and the Bank of England will announce new interest-rate decisions. The Federal Reserve is expected to increase rates by 25 basis points. The Bank of England is expected to increase rates by 50 basis points. In the UK, inflation remains skyhigh with the headline CPI still comfortably above 10% (at 10.5%). The trend in the US inflation is more favorable to the downside (at least the headline inflation rate). However, the service and ex-food and energy inflation numbers remain elevated which should keep the federal reserve on the defensive.