Is it good enough to reverse the declines seen today
The GBPUSD both sharply higher yesterday and in the process extended above a swing area going back to March 19 between 1.38856 and 1.38914 (see blue numbered circles). That was a swing low and then swing high on that day before the pair started to move lower culminating in the recent swing low from March 25.
Yesterday the price moved above that area and tried to stay above today (see blue numbered circle 5). That support could not hold, and the price reversed lower. The pair nearly completed the lap all the way back to the low from yesterday, but down buyers ahead of the low and a swing area between 1.3801 and 1.38116. The price has bounced modestly into another swing area between 1.3846 and 1.38558.
The holding of the swing area is a potential bottom after the sharp move lower today. It would be best for the dip buyers if the 100 hour MA and 50% retracement at the 1.3834 area now held support AND the higher swing area at 1.3846 to 1.38558 be re-broken to the upside. Absent that and the bounce is just a bounce off support, and the sellers still can make a run at the lower support targets.
So the selling may have slowed. The pair is back near some support and that has traders battling it out.
Yesterday, the roles were reversed with buyers in firm control. Today, the sellers are in control. I am watching the 100 hour MA and 50% midpoint for close clues. Then will eye the swing areas above and below for the next clues. The levels can also create a chop (muddy waters) which is exactly what we are seeing now.
