GBP/USD is moving higher and it’s trading at the highest level since August 12 in the meantime. The high has reached 1.2043 so far. Looking at the daily chart, recall from yesterday the price extended up to and above the 50% of the 2022 trading range. That level comes in at 1.2050. The price extended to a high price yesterday of 1.2080 but backed off into the close (closing just above the 50% at 1.2053).

Today, the price slipped lower to 1.2040, but was able to stay comfortably above the old swing high from last week at 1.2030. Staying above that defining level kept the buyers in control, and the price has been able to extend higher in the US session reaching up to 1.2155. The 50% retracement at 1.2050 whihc was the low earlier today is now support. Traders looking for more upside with a more conservative stop could use the 1.2050 level as a stop loss level still.

BOE’s Catherine Mann Speaking

• UK price and wage dynamics are not consistent with 2% target, but not a spiral
• BOE has communicated effectively that rates need to rise
• Market expectation before November meeting were too high (The market had the implied bank rate peaking at around 5.25% in the second half of next year prior to the November 3 rate hike of 75 basis points)

On the topside, the pair is getting closer to a key target. That target being the 200 day moving average at around 1.22. The price has not traded above its 200 day moving average since September last year. I would expect that the 200 day moving average would give traders cause for pause on the first look. If you are a seller look to lean against that level on further upside momentum.

On the downside, it will now take a move back below the 1.2050 level and the 1.20 level to discourage the bullish bias for those traders looking for more upside in the pair.

GBP/USD Live Chart