Bounced of 50% at the lows today

The GBPUSD fell to the lowest level since June 28th today. In the process, the pair moved toward the 50% of the move up from June 21 low. That midpoint line in the sand, comes in at 1.28086. The low reached 1.2811 today. Buyers took profit/maybe bought a little before the UK employment data.

The UK employment data this morning saw the unemployment rate dip to 4.5% from 4.6%. The earnings were lower but as expected at 1.8% but the ex bonuses was a little higher at 2.0% vs 1.9%. The employment change was higher at 175k vs 120k estimate. So overall, it was a decent report and it has contributed to the rebound higher in the GBPUSD (and the fall in the EURGBP).

Technically, the rally has taken the price up toward the 100 hour MA (blue line in the chart above) and a topside trend line. The 100 hour MA comes in at 1.28915. The trend line (moving lower) comes in at 1.2899 currently. The high price today reached 1.2906 (the trend line was at 1.2902 at the time of the high).

There have been zero hourly bar closes above the 100 hour MA or the topside trend line. We are currently testing that MA line. Sellers continue to lean against the level/area as risk is defined and limited. If we get above and are able to close above, it would be more bullish for the pair (PS a move above the trend line is required too). I would expect more buying with the 200 hour MA at 1.29205 the next upside target (green line in the chart above). It is not shown in the chart, but the 50% of the move down from the July 3rd high comes in at the 1.2920 level as well. When the 200 hour MA and 50% retracement are at the same level, that often attracts sellers (at least on the first test).

For now, however, the 100 hour MA and trend line are doing a good job at putting a lid on the upside.