50% retracement and 200 bar moving average of the 4 hour chart stalls the fall
The GBPUSD yesterday stalled at a swing area at the 1.2305 to 1.23126 price area (see yellow area). The price stalled adn corrected modestly higher.
Today, that area was broken and the price continued to the next support levels defined by the:
- 50% retracement at the 1.22694 level, and the
- 200 bar moving average on the 4-hour chart (green line in the chart above).
The move was helped by dovish comments from BOE Saunders.
However, at the lows, the buyers leaned (profit takers or new buyers) and stalled the selling momentum. Risk was defined and limited against the cluster of support (PS. the 50% and 200 bar MA combination tends to give traders cause for pause). The correction higher was on.
The price is back above the swing area at the 1.2305 to 1.23126 (yellow area). Watch that level for support if the low is in place (longs from below want to see that level hold now). A move back below now willl muddy the water a bit for the buyers.
On the topside, should the close support hold, the broken 38.2% at 1.23429 and the underside of the broken trend line at 1.2362 are the next upside targets. That trend line was broken and restested this week before moving lower to the week's lows.