During the Asian Hours, the pair remained in a tight consolidation between 1.31 and 1.3078. After 27.03 the volatility was lost and the movement shrunk within just 20 – 50 pips range, which implies a breakthrough and finding a short-term direction.
Today, at 11:30 (GMT+3), we expect UK labor market data to boost the pair volatility. 50 and 200 moving averages are very close to the price at H1, and on a daily chart the price is also looking for direction and the candles are formed on the 50SMA.
The data a little later will likely lead to a move, with traders looking mainly at 1.31 and 1.3078. A break in the north may lead to a test of the last peak of about 1.33 in the next few days, while a break below 1.3078 is likely to lead to a 200SMA test at D1 1.2980, where bulls may wake up.
The dollar remains slightly disgraced due to positivism around the US-China approaching agreement, and here at a correction to 1.2980 we can look for long positions with SL 1.2880.
Verified break below 200SMA will be extremely negative for the pair.
Trader Nikolay Georgiev