A softer tone off the two month high.
The GBPUSD reached a 2 month high yesterday near the 1.3300 level. That level was between resistance targets between 1.32925 and the 38.2% retracement of the 2018 range at 1.33163 (see yellow area in the chart below). The price moved away from the 100 day MA at 1.31545.
Today the Brexit uncertainty has the GBPUSD trading back down to that 100 day MA (May speaks shortly on the next steps). Going to the 100 day MA is a nice cosy place for the market to settle before going higher or lower on the headlines.
What levels will give bias cliues:
- Obviously the 100 day ma at 1.31543 will define the bullish or bearish bias barometer. Above is more bullish. Below is more bearish. If the market is choppy, traders should use the level as stops.
On a move lower, the technicals become more bearish below the 200 hour MA at 1.31167 (green line chart below).
After that:
- The 38.2% of the September move higher is at 1.31019 (call it 1.3100).
- The 1.3078-86 was a swing area (see yellow area on the hourly chart above)
- The 1.30414 is the 50% of the move up from the Sept 5th swing low. That was also near a low on September 12
On the topside:
- A move above the 100 hour MA at 1.3176 will give buyers more confidence
- A move above the 1.3231 gets the price above the old higher line
- The 1.3298 is the high price from yesterday
- The 1.3316 is the 38.2% from the daily chart
- Above that level and the 1.33615 is the July high price (see on daily).
The market is starting to prepare for more of the Brexit battle that has been going on. Yesterday's stalemate keeps the clock ticking and that has the market on edge. Risk certainly is high and will likely remain high. The technical levels help give a road map for the potential moves. The other alternative - if risk is outside your range of tolerance - is to just sit out this brawl and look for more favorable opportunities. The choice is yours....