GBPUSD falls to new session low

Falls below lower trend line. So much for the bull flag

The GBPUSD has fallen to a new session low and in the process has broken below a lower trendline that helped form a bull flag formation earlier. The pattern is supposed to lead to a run higher that takes the price above the topside trendline, and on to higher levels. The price today did move higher from the lower trend line for a while, but then stalled. The subsequent fall has now taken the price cracking below the lower line. So much for the bull flag.

What now?

The move takes some of the bull out of the market. However, the rising 100 hour MA and 50% of the last trend move higher, will be eyed for additional bias clues. Those levels come in at the1.2902 area. Stay above and the recent buyers (from the November 8 low) are still holding onto the intermediate term control. Move below and the bias shifts more to the downside.

Bull flags are great when they work, but in reality they just form levels above and below (on the trend lines) that define the risk and the bias. If the upper trendline extreme cannot be broken, the lower trendlineis in play.

Here is the link to the debate