The GBPUSD moved to the lowest level since March 2020 yesterday, taking out the low from Tuesday at 1.1806 (which took out the low from last week at 1.1875). The price did bounce as dollar buying stalled and stocks coming off the lows.
Today, the price action has been up and down with the low from Tuesday doing a decent job of holding support. The low in early European session reached 1.18035 just below that level, and the post retail sales initial dip stalled at 1.18063. So there has been a floor being developed near 1.1806. That level will be key short-term barometer going forward.
The move to the upside just reached up to the 100 hour MA at 1.18679 (the high just reached 1.1869). Sellers leaned.
The Bullard comment that he now sees an end of year rate at 3.75 vs 3.5% has pushed the price back down further in the last few minutes. The price currently trades at 1.1836.
What now?
Getting above and staying above the 100 hour moving averages key for the shorter-term bias. So far that level is held keeping the sellers more control.
On the downside, the 1.1806 area is a short-term floor that if broken would increase the bearish bias and give the buyers additional cause for pause. With the current price trading at 1.1834, the price sits between those support and resistance levels and back within the up and down trading range that persisted before the last bump to the upside. However fundamentally, Bullard is helping to put a floor in for the USD. The EURUSD has backed off. The USDCHF has moved higher over the last few minutes..
Overall, the inability to get above the 100 hour moving average with any momentum keeps the sellers in control and with the strongest bias hand. Needless to say the price action from left to right is to the downside in the chart above. That means the buyers have to prove they can take control and win some of the battles. Yes holding 1.1806 was a small victory. However the 100 hour moving average hold is a win for the sellers.