The buyers are being tested
The GBPUSD moved higher for the 2nd consecutive day after the tumble last week took the pair down around 500 pips. The moves higher are modest (relatively), but buyers were able to get the price back above its 100 hour MA at 1.28771. That is the good/bullish news for the dip buyers.
The not so good news is the pair ran into resistance near the highs from yesterday and swing lows from September 9 and September 10 AND a downward sloping trend line going back to the September 1 and September 4 highs at 1.2923. The high price did extend just above those levels to 1.29253 but the price quickly backed off.
The pair is now down retesting the broken 100 hour moving average at 1.28771. A move back below that moving average would disappoint the buyers, and tilt the bias technically back to the downside. The pair closed yesterday at 1.2845. A move back toward that level would be the next target on a break of the 100 hour moving average (blue line).
Buyers have tried to make a play, but there remains more work in order to get more traders on the bullish bandwagon. Yes the price is up for the 2nd consecutive day, but the gains have been relatively modest compared to the sharp declines seen since the September 1 peak. Staying above the 100 hour moving average is essential if the buyers are to keep control. From there extending above the trend line would be the next hurdle. Failure and the buyers are likely to give up.
