The GBPUSD fell to a new cycle low (and the lowest level since April 16) yesterday. However, the move could only take out Fridays low by a few pips and the price spent the London and New York session moving to the upside.
The move higher took the price back above a swing area between 1.38535 and 1.38616, and higher at 1.3886 and 1.38948. The momentum continued until reaching its 100 day moving average (blue overlay line) at 1.3938 near the close yesterday. Sellers leaned and the momentum higher stalled. Good hold at key resistance.
Today, the first two hours of trading could not make any headway above the 100 day moving average, and buyers turned to sellers. The price started to drift back lower.
The move back to the downside saw the price move below the aforementioned swing area at 1.3886 to 1.38948, but stalled at the lower swing area between 1.38535 and 1.38616. The low price reached 1.38596 between those levels. The price has drifted baby higher.
The price is now trading just below the 1.3900 level at 1.3897. The 100 hour moving average has now moved below the 100 day moving average, and is currently at the 38.2% retracement of the move down from last week's high at 1.39178. That combo (100 hour MA and 38.2% retracement) is now the next hurdle if the buyers are to take more control. Above that remains the 100 day moving average at 1.39389. Both those moving average levels would need to be broken to scare shorts and put the buyers back in the drivers seat. Absent that, and the sellers shorts are still driving.