Also finds support near the July 8 low.
The GBPUSD has moved lower for the 2nd day in a row. Recall from yesterday, the price high stalled near the highs from last Friday and last Thursday. The inability to extend above those levels gave the sellers a A-OK to push lower. In the New York afternoon session, the price was able to fall below its 100 hour moving average (blue line). That increase the bearish momentum and by the end of the day, the price had also moved below a trendline around the 1.2567 level.
Today, the downward momentum continued at a more modest pace. However the pair is finding some support near the 38.2% retracement of the move up from the June 29 low at 1.25092. That level also corresponds with the swing low from July 8 at 1.25078. The low today reached 1.25053.
Getting below and staying below the 38.2% retracement is needed to keep the bears satisfied and more in control. A move below the level will have traders looking toward the 50% retracement and swing low from July 7 near the 1.24599 level.
Risk for sellers now would be if the price cannot get below the 38.2% retracement (or fails on a break) and extend back above its 200 hour moving average at 1.25486 (green line in the chart above). If done, the correction lower would just be a plain-vanilla 38.2% retracement test, and the move back above the 200 hour moving average would also be a worry for shorts.
Until then however, the bias remains more in the favor of the sellers - albeit with more to prove (get below the 38.2% and stay below).
