100 bar MA on the 4-hour chart

The GBPUSD has pushed higher as London traders look toward heading for the exits (well some of them at least). The pair tests the 100 bar MA on the 4-hour chart. Although the pair traded above and below that MA prior to the budget speech, that MA has been a key stopping point on two separate occasions this month. It just stalled the corrective rally.

Back on March 3rd, the pair was in the midst of a surge higher, and the MA stalled the charge twice in the same day.

Then again on March 10th (ECB Thursday), the price decline stopped on the level before surging back higher. Those tests - and holds - has me thinking the market is paying close attention to that level....

Through the FOMC, that line will remain a level to define bullish and bearish. My feeling is if we get a move above, the sellers turn back to buyers, but if we stay below sellers remain in control.

What about fundamentally? The story for the pair is probably more easily bearish:

  • Brexit fear keeps the risk to the downside
  • BOE out of the picture
  • GDP and inflation projected to be lower
  • Fed more inclined to tighten more in 2016.

Is all that reasons to sell..now. Honestly, yesterday when the price was moving below the 100 hour MA the 200 bar MA on the 4-hour chart or when the price fell below the 200 hour MA and trend line support. Those technical breaks were the times to sell.

Now, those shorts may be covering and getting ready to watch and react, or as Ryan suggests, get out of some and let the rest run (with different stop options that preserve capital).

What other levels are key?

On the topside, a move above the 1.41114 will next target:

  • 1.41352 - 50% of the move up from the Feb 29 low
  • 1.4149 - The close from yesterday (going positive have an effect on traders.
  • 1.4198 - 38.2% of the move down from Friday's high and also a high corrective price from yesterday.
  • 1.4232 - 200 hour MA.
  • 1.4257-71 - 100 hour MA. 200 bar MA on 4-hour, broken trend line. A move above that area would open up the upside for more upside (if it stayed above - it is a key cluster of resistance).

ON the downside:

  • 1.4064 - 61.8% of the move up from Feb 29
  • 1.4032/40 - Swing highs and lows (see blue circles)
  • 1.3898/1.3913 - A move below 1.4032 puts the price in the up and down consolidation between 1.4032 and 1.3898. The 1.3898-1.3913 are where there were a number of lows.
The story both fundamentally and technically is pointing to the downside, but as we know, anything can happen and they will write the story afterwards. So have the levels mapped out and use them to guide the way - after the details are known.