GBPUSD: 10.07am

Looks like the daily DMA has been thoroughly tested and hopefully off on up to 2Day dma. I have been stopped out for break even 4 times since yesterday afternoon, re-entering at almost exactly the same place each time. I am not the only one being careful here, me thinks! Anyhow, thought it would be worth highlighting how these displaced moving averages forecast price action: the red retracement zone has been shifting uphill since yesterday morning and along with price, has 'cut' the daily dma. However, you can see that the blue daily dma is still descending as this is the half cycle 'tail' of the prior falling trend, not this new rising one. As such, this creates a trough ahead in time, which is where we would expect to see softening in rising prices or a full scale attack of this zone: neither is to be resisted if the intraday trend switches down hill. Not until the 'tail' is rising and the current trend is higher, can we safely assume matters are agreed to fuel persistent momentum in one direction. The price action around the bollingers and SMi clusters helps to describe how this cycle interaction is going as both are more likely to fail to create a 'turn' when both the current trend and its dma are in tune, which they are not at the moment.