Who will blink first?
The next few weeks will be interesting in GBPUSD with the pair seeing the currencies of two central banks intent on tightening going head to head.
This is perhaps why it has entered into broad consolidation with the pair once again failing to make a new low, despite breaking back below the 200/233-day SMA once more.
The pair rotated strongly off 1.3750 over the last 24 hours but it’s already seeing some support. While 1.3750 falls just short of the 50 fib on the 4-hour chart, another push higher would take it into really interesting territory, with the cluster of moving averages and 50/61.8 fib region being a massive test.
A move above here could see consolidation continue, with 1.39 being a big test above here and then 1. 40 . A move above here would see if break out of the consolidation phase and potentially make much larger gains.
Ultimately it may come down to which central bank is keener to tighten or, if the risks mount up, which will blink first. Until then, we may have to endure plenty more consolidation, at which point the moving averages on these longer time frames become less useful.