The GBPUSD found sellers against its 100 hour moving average earlier in the day and lower into the early US session. In an earlier post, I wrote on the inability to move above the 100 hour moving average as being more bearish. However, I also cautioned that getting below the 38.2% retracement 1.24705 was required to give the bears more control/confidence.
That move below the 38.2% retracement cannot be achieved. The low price reached 1.2481 - 11 pips above the 38.2% retracement at 1.24705.
Moreover, the price moved back above its 100 hour moving average 1.25259 (blue line in the chart above) and has pushed even higher breaking above the 200 hour moving average 1.25704.
As the Miami Sound Machine sings "Turn the beat around"
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What now?
The move above the 100 hour MA was a clue the shorter term bias was turning more to the upside. Traders got out and pushed higher.
Now the move above the 200 hour moving average has to also be respected. Stay above is more bullish
The next upside target comes between 1.2600 and 1.26145. Recall from last week, the price traded above and below that area, but on Wednesday the price moved below and stayed below (see red numbered circles).
Admittedly, there were mixed signals in the trading today.
The price initially moved to the downside and broke below the 38.2% retracement. The momentum took the price through other recent swing lows before bouncing higher.
That bounce did the right thing at the 100 hour moving average when sellers leaned against that level (blue line in the chart above). However the 2nd move to the downside could not match the first, nor get to the 38.2% retracement.
As a result, we got the spike higher.
It is now up to the buyers to keep the bullish technical bias in play above the 200 hour moving average. Time will tell. Given the volatility, it may also be a time to step away as buyers and sellers beat each other up.
However what we know at least on the break of the 100 hour moving average, the market definitely turn the beat around.. .