Helped by EURGBP strength
The GBPUSD spent most of the day yesterday holding support against the 100 hour MA (blue line in the chart below). The 38.2% retracement and the 200 hour MA was in the vicinity as well but there was little activity.
In the early Asia-Pacific session, the price move below the 100 hour moving average and after a final test of the 200 hour MA on a failed break higher, the pair has been trending lower over the last 6 hourly bars. The pair is approaching the next support area in the 1.4950-56 area.
Looking at the daily chart. there was an old trend line that connected 3 lows. Last week the pair broke below that trend line and traded below during two days, before squeezing back higher on the ECB day. That "old" trend line comes in at 1.4968. The 1.4950 is an old swing low going back to January. The yellow area had a number of swing lows/highs between Jan and April. The price has moved below the 1.4967 level as I type and is looking toward the next support at 1.4950. There may be a pause on the first look with stops below for intraday traders
The pair has been stepping down in a defined trend. The corrections on the first two legs lower have stalled at the 38.2-50% of the moves lower. That shows the sellers are remaining in control. The current move lower has the 38.2-50% at the 1.4976-823 (using the current low). If the price corrections can stay below that area it shows the sellers are still remaining in control. A move above muddies the water a bit for the trend and may indicate the selling has stalled.
A catalyst for the selling has been a soaring EURGBP. Yesterday the EURGBP spent most of the day trading below the 100 and 200 day MA (at the 0.7200 area). Today, the pair moved above and started to march higher and away from the two MAs.
