On Wednesday and Thursday of last week, the price action in the GBPUSD started to get really choppy. Share moves up. Sharp moves down.
On Friday, there was a run to the downside, and on the move, the price tested a swing low going back to March 25 after breaking below the 100 day MA. The price could not get and stay below those levels, and the price rebounded back higher.
Yesterday, the price moved back down to test the 100 day MA, and the double bottom and once again stalled, creating a triple bottom around the 1.3668 level. The run to the upside was sharp and the price extended above the 100 hour MA (blue line) in the process.
That run above the MA failed and today we are back in a move up, move down, move up and down type of price action day. UGH.
We are back in a solid "Lie down until the feeling goes away" trading market for the pair. Admittedly, there is a lot of currency pairs that are in a sideways up and down range, but you can make a little more sense of their price action technically at least.
For the GBPUSD, one minute it is up, the next down. The choppy price action is ignoring most technical levels that I am accustomed to.
Is that ok?
Yes. Markets are not always smooth. When technicals fail, it is often because of uncertainty fundamentally as well. So there is the equivalent of a drunken bar room brawl, with haymakers being thrown with most punches missing.
So stay out of the fight. If you get the urge to throw a punch contemplate lying down until the feeling goes away. If you want to get in the action, be patient, define your risk. Don't overleverage or think "this is the best trade ever". At some point the market will be more smooth, but for now, its a mess.