The GBPUSD is trading in a very narrow trading range today of 40 pips. The average trading range over the last 22 trading days (around the month of trading) is running at 99 pips. As a result, there is “room to roam” on a break on an extension to the upside or to the downside. Be aware. That is an important clue for traders. If you know there is a good chance for an extension of a daily extreme because the range is so narrow, you can benefit from that knowledge.
Technical Analysis: GBPUSD trades in a narrow trading range today. Look for a break with momentum
Looking at the hourly chart above, the price of the pair has been tracking above the 100 hour moving average (blue line in the chart above). That level currently comes in at 1.6372. On the topside. The high from yesterday at 1.6413, has acted as a ceiling in trading today. A break either below the 100 hour moving average or above the ceiling will be eyed by traders for additional momentum.
On the upside, a move above will next target the 1.6432 level which is the 61.8% retracement of the move down from the post Scotland referendum high. Above that level, the underside of the broken trend line comes in at 1.6470 currently.
On the downside. The next major target becomes the trend line connecting the most recent lows. That level comes in at the 1.6333 level currently. Yesterday, the price fell below the 100 hour moving average, but found support buyers against this trend line. The 200 hour MA (green line in the chart above comes in at 1.6314.
