Traders still in a battle
The GBPUSD opened the Asia-Pacific session near unchanged from Friday and after a run up and peak just above the high from the post-US employment trading (the high today reached 1.5243 while the high on Friday reach 1.5236), weaker UK data has pushed the price lower.
As NY traders enter, the price is back near unchanged levels on the day. The market continues to be unsure of the directional bias. The price is trading) midpoint of the last 6 trading days (at 1.51751. The 100 hour MA (blue line in the chart above comes in at 1.5159, and the broken trendline comes in at 1.5146. The current price is below the 200 hour MA at the 1.5191 area.
So what do we know?
- Failed to find momentum above the Friday high - bearish
- Unchanged on the day -neutral
- Below the 200 hour MA- bearish
- Above the 100 hour MA - bullish
- Above the broken trend line. - bullish
The hourly chart is showing neutrality.
Looking at the daily chart, the recent price lows pre-September were in the 1.5162-89 area (see yellow area in the chart below). The price last week, fell below this area and had a chance to move lower. It did not. However, the rally back above the "yellow area" was not exactly endorsing of the failure below. We remain below the 200 day MA (green line above at 1.5322). That was also swing lows in July and in mid September at 1.5329 (see chart below). That area would be a target, IF the price can find support in this area and start to pick away at the resistance levels above. That is "IF".
So overall, is there a clear picture?
On the downside, a and test in the 1.5146 to 1.5159 area (200 hour MA and underside of the broken trend line) would be a low risk, patient buy area (that is risk for those looking for dollar weakness to take hold) If that is the trade, a move back above the 200 hour MA is needed at the 1.5191 (and then a move above 1.5200-138)
If the downside is fancied, day traders may look to keep below the 200 hour MA at the 1.5191 level instead and work on getting below the 100 hour MA and the broken trend line at 1.5159 and 1.5146 respectively.
US data was weak on Friday. UK data was weak today. Market price action is stuck in the mud.