The GBPUSD moved below a swing area on the daily chart on Monday. That swing area came between 1.3133 and 1.31868. The selling continued on Tuesday to the lowest low since early November 2020 at 1.30808. However the price snapback higher yesterday, and retested the high of the swing area. Today that high was eclipsed, but only to 1.31938 – about seven pips above the upper extreme.
The inability to push higher turned buyers back to sellers and the price has since moved back down toward the lower extreme of the swing area near 1.3133. Get below that level and stay below would have traders targeting the low for the week at 1.30808 again and potentially other lower levels. It also would reestablish the upper end of the swing area as key resistance. Stay below is more bearish.
Drilling to the hourly chart below, the extensions above the 1.3186 level was short lived and without increased momentum. The most recent price decline has now taken the price to a new session low for the day. That move has seen the price also move back below its 100 hour moving average (blue line) at 1.3154.
Admittedly, the price has traded above and below that moving average for most of the day. Nevertheless the move lower and the fall below the 1.3133 lower extreme is more bearish. Traders in the short term can now use the 100 hour moving average as close resistance. Stay below is more bearish. Then look for the traders to make a run toward the 1.30808 low for the week.
