GBPUSD back below the 100/200 day MA
The GBPUSD is trading to new session lows. The price just reached 1.2688. That took out the earlier session low at 1.26935. It also dipped below the low from yesterday at 1.26892. The low for the week currently comes in at 1.26737 and that would be the next downside target for the pair.
The move lower has taken the price back below its 100 and 200 day moving averages once again. The 100 day moving average is currently at 1.27297. The 200 day moving average is 1.27161. Having said that, the price action has taken the price of the GBPUSD above and below the moving averages this week. That has been disappointing from a technical perspective. Normally, the MA breaks are a signal to move away (either higher or lower). This week, there has been a lot of choppy action above and below the MAs.
All is not lost technically, however, as the inability to trend away from the moving averages tells us as traders that "the market" is unsure of the next trend move. That has to be sorted out. Eventually it will move away.
The rise earlier today not only extended above the daily MA, but also the 100 hour moving average (currently at 1.27534). That was the first break since Monday. That was bullish.
However, once the price reached the 1.2800 area (home to the 38.2%), buyers turned to sellers and the price rotated back below that hourly moving average. That was bearish.
What now?
Well choppy non-trend begets non-trend until it doesn't. As a result, traders have to respect the extremes as potential support (resistance) levels, but be aware that the non-trend will also eventually lead to a break and trend.
I said it earlier this week, when the price dipped below the 100/200 and failed, that the sellers had there shot. The price should go higher on the failure and it did, but could not reach the next targets with much luck including the 38.2% retracement.
Today the buyers had their shot with the extension toward the 1.2800/38.2% retracement level and failed. As a result, the sellers have more control. Having said that, a break below the lows for the week (and staying below) will be eyed. The 100 day MA will be close risk defining levels for short at 1.27297.
Sellers are making a play, but it needs another shove. It also needs to stay below the 100 day MA. Failure and it joins the list of others from this week as the "market" continues to decide what to do next for this pair.
