Sellers lean against the 100 hour moving average on the first look
The disappointing US retail sales has pushed the GBPUSD to a new session high, and in the process has the pair testing its 100 hour moving average (blue line) at 1.4094 (see post from yesterday). The first look has found sellers against the level as risk can be defined and limited (with stops on a break above). A break above would have the swing low floor from May 10, May 11 and into May 12 at 1.4102 to 1.41064 as the next hurdle. The highs for the week were up at 1.41578 and 1.41659 (from Monday and Tuesday).
Looking back to last Friday, the GBPUSD rallied sharply higher on US employment day last Friday and followed that sharp gain with another sharp price increase on Monday (on Scottish election results).
The pair peaked on Tuesday after failing to extend much higher above Monday's high (momentum failed). On Wednesday, US CPI data sent the US dollar higher and the GBPUSD pair lower (to test the rising 100 hour moving average). Yesterday that 100 hour moving average was broken with more momentum.
The low yesterday reached 1.4004, but could not get below the natural 1.4000 level, nor the rising 200 hour moving average (green line).
Today's price action has been mostly to the upside, but with the 100 hour moving average in the way, traders are taking some profits. Watch the 1.40793 level as a close barometer intraday. That level was the initial swing low after the CPI on Wednesday. Yesterday sellers leaned against that level in the Asian session as well. A move below could see more probing to the downside ahead of the weekend.
Conversely holding 1.40793, could lead to a springboard move above the 100 hour moving average and the old floor area between 1.41021 and 1.41064.