The GBPUSD made the break lower and extended the trading range for the day in the process (SEE PRIOR POST). The range is now a more respectable 86 pips which is closer to the 99 pip average that the pair has had over the last 22 trading days (about a month of trading).
Technical Analysis: GBPUSD trying to add to intraday bearish bias.
The price remains below the 100 hour MA (blue line at 1.6373 currently) which is key going forward for the bears. This week, there has been two other looks below this MA line and both failed. This is the third look, and technical traders who are short on the change in bias, will want to see some further “love” from the break this time. So risk is defined against the MA line once again.
On the downside, the upward sloping trend line and the 200 hour MA (green line at 1.6315) are the next key targets. A move each will next look toward the 50% of the move up from the September 9 low. That level comes in at the 1.62868. The low from Friday’s post-Scotland referendum was at 1.6285 (just a pip or so away). So you can expect that traders – who are not believing of the move lower – will try to buy against this level on the first test (good take profit level)
Although, I am focused on the 100 hour MA break and listening to that, traders who are looking for that “dip to buy”, may find the current level your place to buy. Like shorts who want to see the 200 hour MA broken, buyers against this MA level, would not want to see a break below.
Instead buyers would want to see the 100 hour MA (blue line) broken above to help confirm the bottom is indeed in place.
When the market trades below the 100 bar MA but above the 200 bar MA, it really is a point where the market has a decision to make. That decision should be decided by “the market” when the buyers overwhelm the sellers and take the price above the 100 hour MA or when the sellers make the next push below the 200 hour MA. Pick your poison if you have a bias…
I will look for the break below (but am cautiously bearish with limited risk).