Pair falls on Brexit fears.
The GBPUSD moved up to the September 16 high at 1.30064 and stalled. Sellers leaned against the swing high and it paid off after reports that the EU would ignore the October 15 Brexit deadline on the hopes that the UK will back down at the last minute. Sometimes best to be lucky than smart.
However the fact is, traders make their own luck by being aware of the key resistance targets and leaning against them where risk can be defined risk be limited. In a post yesterday, I wrote:
Although higher, the pair has some technical resistance looming ahead between 1.2993 and 1.3006. Swing highs going back to September 16, September 17, and September 18 all stalled in that area (with some choppy up and down action to that area all finding sellers). It will take a move above that area, to solicit more upside momentum.
See post from yesterday.
The fall off the EU headlines saw the pair move down to test the 100 hour MA (blue line). That MA currently comes in at 1.29249 (and rising). It will take a move and momentum below that level to have traders pushing further to the downside. The 38.2% of the move up from the swing low at September 25 comes in at 1.2884 and that would be a target on more weakness. Below that is the 200 hour MA at 1.2862.
On the topside, the buyers need to build value back above the 1.2953 level (high from Friday and a swing high from early Monday as well). The bounce off the low has moved above that level but has not been able to extend far from that level. If the price can stay above, the high from last week at 1.29778 would be the next target.