The GBPUSD bottomed yesterday 1.24103. That took the price to the lowest level since July 2, 2020.
Looking at the daily chart above, the price decline yesterday moved below the 61.8% retracement of the move up from the 2020 low at 1.24936, and closed below that level at 1.24587.
However, after dipping to a Asian session low at 1.2436 today, the price started to rebound back to the upside and was able to extend above the aforementioned 61.8% retracement again at 1.24936. Watch that level going forward.
Looking at the hourly chart, the rise off the low today saw the price extend back toward its falling 100 hour moving average (blue line in the chart below). That moving average currently comes in at 1.2587. The high price today reached 1.25849 before rotating modestly to the downside. The price of the GBPUSD as not traded above its 100 hour moving average since April 22. Of note is that the 50% midpoint of the move down from Tuesday's high is also near that moving average line at 1.2591.
It would take a move above that moving average line and 50% of the last trend leg down, to give the buyers some additional confidence. Absent that and the correction today is more of a plain-vanilla. The buyers would not be out of the woods. The sellers would still be in have more control
On further downside watch the 1.24905 to 1.25022 area. The low on Wednesday was near the high of that swing area. A low on Thursday (before extending lower) defined the low of that swing area (see red numbered circles). The aforementioned 61.8% retracement on the daily chart is also between that area at 1.24936 increasing the areas importance going forward.
