Consolidation box busted
The GBPUSD moved to the low from March 1st yesterday and stalled (See: "Here's the problem with the GBPUSD price action for the sellers today"). That was a problem for the sellers yesterday, and the price did correct higher.
However, the corrective move off the low stalled against a topside trend line on the 4-hour chart (and hourly if you look at it too - see chart below). The stall at that level was an invitation to sellers. The weaker data out of the UK shoved the price below the 1.3711 level and the pair trundled lower.
The fall below the 1.3711 was a key break. It got the GBPUSD out of the box that has confined the pair over the last 3 plus months of trading (see red box on the daily chart above). Going forward, the 1.3711 level is now key resistance. If the break is real, that box should not be reentered.
On the downside now, the 200 day MA at 1.35269 is the next key target. The price of the GBPUSD has not traded below the 200 day MA since April 18th. That is over a year ago now. Below that, and the pair will look toward the 38.2% of the move up from the December 2016 low at 1.34631.
Drilling to the hourly chart below, the pairs run lower today cracked below a trend line at 1.3638 (and moving lower). That is a closer risk level for shorts now. When a lower trend line is broken that increases the downside momentum. Stay below keeps the bears in control. Failing on the break (moving above) could lead to more corrective action toward the KEY 1.3711 level.
Right now though, the bears are in control. Stay below 1.3638 keeps them happy. A move to the 200 day MA is the next key test. That levels should be a tough nut to crack on the first look.....
