GBPUSD corrects lower after run above 100 day MA runs out of steam
The GBPUSD moved above its 100 day moving average yesterday for the 1st time since May 2019. That moving average currently comes in around the 1.2497 level. Today, the price moved below that moving average level early in the Asian session. It had one test but stayed below it as traders leaned with a bearish bias.
The price action in the London session took the pair close to its 38.2% retracement of the last trend move higher from the low from last Thursday at the 1.2433 level (at 1.2433). The rising 100 hour moving average is also currently near that level (blue line in the chart above).
Recall from yesterday's trading that the 100 hour moving average stalled the fall before turning around and rising sharply into the New York afternoon session (and above that 100 day moving average - see chart above)). Staying above the 100 hour MA, keeps the bulls more in control, while a break below should solicit stops and more selling pressure. The 200 hour moving average (green line in the chart above) would be the next target at 1.2382 area.
We currently trade at 1.24696 and near New York session highs despite the better than expected housing data (12 year highs for both housing starts and building permits). The 1.2475 level was a swing high going back to Friday and would be the next minor target to the topside. The 100 day moving average is more important at 1.24972.
Although the buyers continue to hold a little more control off the hourly chart, the daily chart's 100 day moving average up at 1.24972 is also a key barometer going forward. Staying below keeps the sellers more in control from that perspective.
Traders have to respect each technical bias and trading so far today is doing just that. Look for the break and momentum either above the 100 day moving average or below the 100 hour moving average to tilt that traders respect in the direction of the break.
