Concerns about Brexit hurting the pound in trading today
Concerns about Brexit talks with the EU have been pressuring the GBP in trading today. The EURGBP is breaking higher and the GBPUSD is moving lower. The pair just reached a new session low.
Technically, the price action has moved below the 38.2% retracement of the move up from the March low to the April high. That level comes in at 1.21737. Yesterday the price moved below that level to 1.2165, but the selling momentum could not be sustained and the price rebounded higher into the close.
Today's move is showing more momentum through the 38.2% retracement level. Bearish
The pair is now looking to test swing low levels at 1.2127. The swing low from March 27 came in at that level. The April low was at 1.2161. A swing high from March 18 reach 1.21287.
Move below the 1.2127 level, and it opens the door on the daily chart, for a move toward the 50% retracement of the same move higher. That level comes in at 1.20276 (the price is moving below the 1.2127 level as I type. The low just reached 1.21184).
Drilling to the hourly chart, there is some interim support to deal with despite the break lower. Looking at the chart, a lower trendline cuts across at 1.2113. That trendline did stall the fall yesterday (red circle 4 in the chart below). Will it do the same today?
Overall the trend is to the downside for the pair, but a support level is being approached. Being Friday, it may attract some profit-taking potential with stops on a break below.
For the week, the GBPUSD reached it's high on Monday at 1.24366. That high stalled just ahead of its 200 hour moving average at the time. The price moved below its 100 hour moving average later in the day.
On Tuesday the price to correct above its 100 hour moving average but only for a few hours of trading before rotating back to the downside. On Wednesday price stalled ahead of the 100 hour moving average and it has been running away from that level since that time.
Bears have been in control all week. The trend has been to the downside.
