The GBPUSD has maintained its downward trajectory today, following yesterday's significant drop from a new 2023 high of 1.25833 on Friday. Yesterday's decline brought the pair down to its 100-hour moving average (blue line), where buyers halted the fall. The low reached 1.24797 before consolidation. In today's Asian session, the price rebounded towards a swing area between 1.2511 and 1.25149 (see red numbered circles on the chart above). Sellers resisted this area twice today, leading to further declines in the European session.
The 200-hour moving average (green line in the chart above) and the 50% midpoint of the move up from the April 17 low were breached around 1.24678. Last Thursday and Friday, buyers had supported the market just ahead of the 200-hour moving average, emphasizing its importance of that MA level. Today's break resulted in a drop to Monday's morning low of 1.2452 before a quick recovery above the retracement and moving average levels disappointed sellers.
However, in early US trading, the 200-hour moving average and 50% retracement have been re-broken, with the price reaching a new intraday low of 1.2450. What now?
Can the 200-hour moving average and 50% retracement now act as resistance and maintain the downward momentum? These dual technical levels now represent a tight risk for sellers seeking further decline.
On the downside, Friday and Thursday's swing lows are at 1.2445 and 1.2435, respectively, with the 61.8% retracement of the move up from April 17 also falling between these levels. A drop below 1.2435 would open the door for additional declines. Conversely, a move back above the dual technical levels near 1.24678 would continue to frustrate sellers. Another failure could prompt a more significant upside push towards the 100-hour moving average, near 1.2500 on the disappointment once again.
Sellers make a play, but they need to stay below the 1.24678 level..
