Buying Dips Favoured In GBPUSD

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The US dollar weakened recently against many major currencies, including the British pound. The main catalyst for the down move was the US nonfarm payrolls report, which came below the forecast. The GBPUSD pair traded higher and might continue to gain pace in the near term. The European market is again closed today due to Easter Monday holidays. We need to see how the US dollar trades in the near term, as there is a chance of correction, which can be considered as a buying opportunity. However, we cannot deny the fact that the US dollar might trade higher one more time if momentum shift fails.

There was a critical bearish trend line formed on the hourly chart of the GBPUSD pair, which was broken recently and pushed the pair towards the 1.4940 level where it found sellers. The pair is currently moving lower and might test the 38.2% fib retracement level of the last leg from the 1.4478 low to 1.4944 high. However, the most important support can be seen around the 50% fib retracement level, which is around the broken trend line. The pair is well placed above the 100 and 200 hourly simple moving averages, which is one more positive sign ahead. Let us see how the British pound buyers react if the pair moves lower from the current levels.

GBPUSD 04.06.2015

If the GBPUSD pair moves higher and gains pace one more time, then a retest of the last high of 1.4940 might act as a resistance and could stall the upside moving ahead.

Overall, one might consider buying dips in the GBPUSD pair as long as the pair is above the 100 MA.

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