More corrective (higher) in trading today. GBPUSD has traded below 100 MA since Dec 29th
The GBPUSD tested the 100 hour moving average (blue line in the chart below) in trading today at the 1.46056 level. The high price for the day came at 1.46039 so far. Looking at the hourly chart below, the price bottomed in the Asia-Pacific session, and later moved above an old trendline and above some swing lows at the 1.4553 area. That level ended up holding support before the last push to the upside.
So traders seem to be looking for a correction in this pair. However, a move above the 100 hour moving average is still needed to confirm additional upside corrective potential. On a break, the next target would be 1.4644 and then 1.4663, which is the 38.2% retracement of the move down from the December 24 high to the low reached today (see chart above). The 200 hour moving average comes in at 1.4695 (and moving lower).
Looking at the daily chart, it is saying down, down, down, as the market price has trended lower over the last 3+ weeks of trading. Last week the price fell below the low price from April 2015 (low price from 2015) at the 1.4565 level. This level may also prove to be a support level for the pair TODAY. Be aware. A break below might also be a predictor of more downside pressure with a break below 1.4553 a confirmation that the sellers are not done yet. Staying above this support, however, should solicit more buying as traders take a breather from the selling that has taken the pair from a high of 1.5238 to the low of 1.4490 in 19 trading days (748 pips). During that stretch there have been 9 straight lower closes. Today that string is in jeopardy of being broken (the price closed at 1.4512 on Friday).
Trends transition to non-trends. The action might be corrective (especially if the aforementioned support holds) but action may also be more choppy as well. Pay attention to the targets to help determine how the correction might go, but overall, I will be expecting if the upside is explored, levels like the 200 hour MA (green line) will give cause for pause on the first look.
