GBPUSD has defined the risk levels. What levels should you look at and why?

The GBPUSD GBP/USD The GBP/USD is the currency pair encompassing the United Kingdom’s currency, the British pound sterling (symbol £, code GBP), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one British pound. For example, when the GBP/USD is trading at 1.5000, it means 1 pound is equivalent to 1.5 dollars. The GBP/USD is the fourth most traded currency pair on the forex exchange market, giving it ample liquidity a The GBP/USD is the currency pair encompassing the United Kingdom’s currency, the British pound sterling (symbol £, code GBP), and the dollar of the United States of America (symbol $, code USD). The pair’s rate indicates how many US dollars are needed in order to purchase one British pound. For example, when the GBP/USD is trading at 1.5000, it means 1 pound is equivalent to 1.5 dollars. The GBP/USD is the fourth most traded currency pair on the forex exchange market, giving it ample liquidity a Read this Term had a volatile run of it after the BOE said they would be buying bonds to help stem the exodus out of their debt. As a result, the UK 10 year yield is down -41 basis points. The 30 year yield is down -98 basis points on the day.

Looking at the GBPUSD, the price spiked up to 1.08366 on the headline. That was right near the high price from yesterday and just below the 50% midpoint of the move down from the last Thursday high. That Thursday high tested the 100 hour moving average at the time and started the last trend move to the downside.

The 50% retracement level of that move cuts across at 1.08584. The 100 hour MA (blue line in the chart above) is right at that level as well increasing the areas importance.

Earmark the area between 1.08366 1.08584 has a key resistance level Resistance Level A trading resistance or resistance level reflects a given price that acts as a temporary ceiling for an asset. In its most basic form, this level pressures an asset’s price from rising above it, either acting as an outright barrier or exerting pressure in doing so.This pressure is due to a growing number of sellers who wish to sell at the particular price at a defined resistance level. Resistance levels can either be temporary constructs, longer-lasting ones, or purely psychological. As a result A trading resistance or resistance level reflects a given price that acts as a temporary ceiling for an asset. In its most basic form, this level pressures an asset’s price from rising above it, either acting as an outright barrier or exerting pressure in doing so.This pressure is due to a growing number of sellers who wish to sell at the particular price at a defined resistance level. Resistance levels can either be temporary constructs, longer-lasting ones, or purely psychological. As a result Read this Term to get to and through and stay above if the buyers are to take more control in the GBPUSD.

On the downside, the price decline from the high reached all the way down to 1.0537 level. If you look at the monthly chart below, THAT level was near the swing lows (and lowest levels on record until this week) going all the way back to February and March 1985. The low price in February reached 1.0520. The low price in March reached 1.0545. The low price today stalled between those levels at 1.0537.

Earmark 1.0520 to 1.0545 as key support.

So 1.08366 to 1.08584 is resistance above and 1.0520 to 1.0545 is support above.

Are there any key interim levels?

Between the two levels sits the 38.2% retracement of the move down from last Thursday's high. That level comes in at 1.07392. Looking at the hourly chart above, the Asian session low price yesterday stalled against that level. Then stalled against the level in the US session later in the day before breaking below it.

That 38.2 retracement level then became resistance at the end of day yesterday and into the Asian session today before the spike higher. The price tumbled below the level on the way to the session low today.

Currently, the priceis moving back toward that level with the pair trading at 1.07225. Traders will be watching that level for potential resistance sellers once again. Conversely, a move above would tilt the bias more to the upside in the short-term.