Can intraday support hold?
The GBPUSD had a nice move higher off a pretty good support level defined by swing lows post the UK snap election announcement (see post from earlier today). That area (between 1.2768-74) stalled the fall last Friday (May 26th) and again today. The rally from the that low has trended the price up 152 pips.
The high did find a stall point. That occurred at 100 bar MA on the 4 hour chart at 1.29205 (the 200 hour MA was also in the area at 1.2916). The high price today reached 1.29203.
The momentum was also stalled after the Chicago PMI was corrected to show a gain to 59.4 from an initial announced number of 55.2. Whoops. Certainly, that took some of the air out of the buyers sails today.
We currently trade at 1.2886. The 200 bar MA on the 4-hour chart comes in at 1.2877. The 38.2% of the move down from the May high comes in at 1.28747.
It might be pushing the envelop to buy the dip against the area defined by those tech levels at 1.28747-1.2877, but traders who like the dip, this is a dip to lean against. Hold and another move above the 1.29000 level could lead to another test of that key resistance area defined by the 100 bar MA at 1.29205. If the trade idea fails (i.e there is a move below the 1.2875-77 area, the risk is defined and limited.
PS for those who hate the GBPUSD (worried about the election results), the same support level becomes your target to get below. If broken, the highs will look like that is it.