The GBPUSD story has been centered around the 1.6000 level over the last 6 weeks of trading. That level has been talked about over and over again (at least in most of my posts on the GBPUSD).
GBPUSD is developing strong support at the 1.5853-73 area now.
There is another area of significance developing. That is the 1.5853-73 area.
Going back to November 2013, the low on November 12 came in at 1.58533. From there the price traded higher ending at the July 2014 high of 1.71898.
Fast-forward to October 2014. The low of the trend move down from the July high stalled that 1.58734 – just 20 pips away from the 1.5853 target low.
Since that time, the GBPUSD has continued the consolidation and choppy trading action.
Yesterday, the price moved sharply lower in Asian in early London trading. The trend move lower took the price below the October low – extending the 2014 trading range to a new low of 1.58678. However, the price could not extend down to the 1.5853 November 2013 target, and from there a sharp rally sent the pair back higher.
So now there are three separate lows between 1.5853 and 1.5873 that traders are eyeing as a level to lean against to buy on dips.
The hourly chart shows 3 tests of the lows going back to October.
In today’s trading (see hourly chart above) , the GBPUSD is once again pushing lower away from the 1.6000 level (the high reached 1.5996 – good for the bears of course). The low has only gotten to 1.58858. Needless to say that key support area looms large for traders should the price momentum lower continue in trading today or going forward. The price cannot go lower until those levels can be broken and stay broken.
So the 1.5853-73 remains a key level for the GBPUSD. Look for a buyers on dips against the levels with stops below the 1.5853 .
