GBPUSD bounces off the high from Monday on the US session correction

Technical Analysis

Author: Greg Michalowski | gbpusd

Earlier resistance at on old swing area floor stalled the earlier rally.

As per an earlier post, the GBPUSD did run higher and find resistance in a swing area between 1.3725 and 1.3733. The US session has seen a rotation back to the downside. 

Earlier resistance at on old swing area floor stalled the earlier rally.

The move back lower in the US session came despite rates moving lower. The US 10 year is now down -3.3 basis points while the UK 10 year is down only -0.3 basis points on the day.  

US stocks remain well supported with the Dow Jones now up over 500 points and the NASDAQ index up 1.67%.

Typically, that combination tends to weaken the dollar as flow of funds head to the "risk on currencies" and out of the US dollar

I guess the technicals have been more of an influence at least in the NY session.

The move to the downside in the GBPUSD, however, has found some support buying near the swing high from Monday's trade at 1.36738. The low price just reached 1.36747 just above that level. The pair is tilting back to the upside with the pair currently trading at 1.36879. 

Is the low in place?  

The low in the GBPUSD was a downside target and old high. The correction to it and hold above it (PS the price remains above the 50% retracement as well at 1.36617 on the hourly chart), at the least defines (and solidifies) a risk level for buyers.  

Stay above and we could see a rotation back toward the resistance at the highs for the day.

Invest in yourself. See our forex education hub.
By continuing to browse our site you agree to our use of cookies, revised Privacy Notice and Terms of Service. More information about cookiesClose