Forex technical analysis: GBPUSD trades near middle of day's range. Support developing?

Technical Analysis

Author: Greg Michalowski | gbpusd

The low area stalled near December swing high.

The GBPUSD stumbled lower yesterday after the big move higher on Tuesday. The low reached 1.27687. The low today has been a bit higher at 1.27711.  If you look back to December, the swing high stalled at 1.2774  Is the market trying to put a floor against an old ceiling?  The GBPUSD traded in an up and down range going back to October with that level as the peak. We broke out. If it holds, that is more bullish. If it is broken (and stays broken), we are back in the Red Box in the chart below.  We need to pay attention to that level. 

Drilling to the hourly chart below, it shows the price action around that 1.2774 level.  Yesterday, the level was tested twice (closing near the level actually at 1.2775).  Today, the Asian traders tickled the line for the first 5 hours before moving higher.   PS the 38.2% of the move up from Tuesday's low comes in at 1.2754. We remain above it.

Now the upside today is confined. The high's today - and yesterday - are progressively lower (1.2903, 1.28595, 1.2858, and today at 1.28439).  So there are sellers and buyers. BUT, the last big move was the run higher on Tuesday. The correction has stalled "near' the December high, and the 38.2% of the move higher is still not been breached. Get below the 1.2774 level and stay below and the tune starts to sound more of a bearish one. 

Can we gleam anything from the intraday 5-minute chart?  The rally was steady off the 1.2774 area but we have seen just as steep fall from the peak. We are below the 50% midpoint at 1.2807 and below the 100 and 200 bar MA.  Buyers would like to see those levels broken to the upside to give more confidence. 

So the story is still developing with some bull/some bear perspectives.  Technically stay above 1.2774 and I give the nod to the bulls. Move below and stay below and the tone of the story starts to change