The GBPUSD is trading to its lowest level since July 2020, and in the process has reached a swing area target between 1.2634 and 1.2674 (see red numbered circles in the chart above - see post from yesterday). The price is trading at 1.2669 just above the low for the day 1.2662.
The buyers should have some cause for pause within the area but at 40 pips wide, there is some room to the downside swing level (at 1.2634). A move below 1.2634, however, should lead to more sellers on stops. The next target would be the 61.8% of the move up from the 2020 low at 1.24936 on the daily chart.
Looking at the hourly chart, from the high just three days ago at 1.30897, the price has moved about 430 pips from that level. The momentum lower was kickstarted after breaking below the April 13 swing low at 1.29710. There have been little in the way of corrective moves from the tumble lower. The move higher off of yesterday's low was the largest correction (around 77 pips). Even still, that correction could not reach the 38.2% retracement of the last trend leg down at 1.27799 (see hourly chart below). The high price reached 1.27719 today before rotating back to the down side.
In the short term, traders will now watch the low price from yesterday at 1.26961 (call it 1.2700) as a close risk level. Stay below keeps the sellers firmly in control. Move above that level and there could be some dip buying especially off of the swing area target on the daily chart. Putting in another way, if the buyers can't get above that level, they are not winning, and continue to lose in the trend move lower.
PS The price is trading at a new session low at 1.2656 as I type.