The GBPUSD moves below 200 hour ma, trend line but finds support at swing area
Earlier in the day, the GBPUSD was finding support buyers near the 200 hour MA. However, if broken, the downside was vulnerable. I wrote:
That 200 hour moving average will be a barometer for buyers and sellers going forward on the downside. Move below, and the bias turns more negative with 1.38869, the rising trend line at 1.3874 and the swing area near the 1.3854 to 1.3863 (low from Friday) as the downside targets.
What happened?
The 200 hour MA was broken, the 1.28869 and trend line were broken as well, and the price entered the swing area between 1.3854 and 1.3863.
The low price reached just below the lower extreme at 1.38525 and bounced. The price currently trades at 1.3887 back above the underside of the broken trend line. There is now a chance to retest the original break point at the 200 hour MA.
The range for the day is now 97 pips which is still short of the 107 average over the last month of trading. Although still light of average, it may be close enough to call the low at 1.38525 the bottom. The technical swing area, and expanded range, was also the the reason the buyers lined up near that support area. In other words, the price went enough for buyers to stick a toe in the water at the area.
Sellers on the break of the 200 hour MA, had a nice trade in a relatively short period of time.
It pays to map out the plan from what you see. The 200 hour MA was a nice floor and the 100 hour MA (blue line) was a ceiling as well When the sellers leaned against the 100 hour MA and sold through the 200 hour MA, the trade was on with clearly defined targets.
When enough was enough and a key support target was reached, the bias switched back to the upside. Now traders will see if the initial break point, becomes the new sell point.
