THE GBPUSD moved below the 38.2% retracement, and the lows for the day at the 1.61509 area, and more serious selling began (see earlier post: “GBP: Can the Post-FOMC rally continue?” ). The price moved to a low of 1.6107 by the time it was all done, breaking below the 200 hour MA (green line at 1.61294) and the 50% of the move up from the pre-FOMC minutes low at the 1.61279.
The 61.8% level held, but the key for me now is “Can the 50% and the 200 hour MA keep the lid on it”. The good news is traders know darn well what needs to be done. For sellers, stay below the two key levels, and for the buyers it is the exact opposite – get back above the two key level.
That makes for the “Line in the Sand”. Pay attention traders. Sellers in control.
GBPUSD hourly chart . The Line in the Sand.
A a break below the 61.8%, the 100 hour MA(blue line) becomes the next target into the NY afternoon trading. It would be stretching the limits for the pair, as the range is already 120 pips (vs a 117 average for the last 22 trading days), but trends can be fast, directional and go farther than you think. The ranger reaching it’s average may also attract buyers against the low. The battle line is drawn above. Sellers are pushing against that level.
