Buyers run away from the 100 hour moving average after 2 earlier failed breaks
As London/European traders look to exit for the day, the GBPUSD has made a run back to the upside. The move has pushed the price while away from its 100 hour moving average. Earlier in the day, the pair broke back above that level only to back off and fall back below its 200 hour moving average at 1.31057 and below the 1.3100 natural support level as well. The low price reached 1.30793.
The last few hours however have seen the fortunes reversed back to the upside. Initially there was another break of the 100 hour moving average which failed but buyers reentered and shove the price higher over the last hour.
The pair is now corrected more than 61.8% of the move to the downside (above 1.3189), and back above the swing high from August 6 at 1.31851. The pair did not have much trouble getting back above the 50% of the move down from yesterday's high at 1.31651. That will now be eyed as risk for buyers.
Taking a broader look at the daily chart, the GBPUSD is approaching a key resistance area between 1.3199 and 1.32116. Those levels correspond with swing highs going back to January and again in March (see yellow area in the chart below).
The runs of light have been quite dramatic in this pair. On Monday and Tuesday the price soared to the upside. Yesterday - and into today - the price tumbled to the downside. And now we are seeing a rotation back higher. Can be trust it? I am not all that convinced. However, the key resistance on the daily looms. A break above is even more bullish. On the downside getting back below the 50% retracement will be eyed.
PS: there is report that the Brexit talks are set to and without a breakthrough. HMMMM. Watch sellers ahead of the 1.3200 level with stops on momentum above.
