The GBPUSD is back below 38.2%, 200 hour MA swing level. Can it stay below?
Not running but staying below...
The GBPUSD tumbled in trading yesterday on the back of technical breaks and some weaker than expected inflation data.
The fall took the price to the 50% retracement of the April trading range. The rest of the day saw trading above and below the 200 hour MA.
The last 7 trading hours, has seen the price below the 200 hour MA. That MA comes in at 1.42153 (and rising a bit). The 38.2% of the April range comes 1.4219. That area is close risk for shorts looking for more downside in the pair.
There was a Reuters poll released yesterday that showed a large majority of UK economists see a 0.25% hike in May. So does the currency run too far to the downside?
Then you look at the daily chart (see below), and the pair had some trouble this week when it made a new highs going back to Brexit 2016. The price is also testing the underside of a broken trend line at 1.4202. If that level can be broken (say get below the 1.4200 level and stay below), without moving above the 1.4219 area, the selling can continue. A corrective lower target on the daily could be he lower trend line at 1.4000 currently. That is doable.
SUMMARY: The price is at 1.4207 currently. The close risk level for shorts is there. The target of getting below the 1.4200 level is ahead, followed by the 50% retracement on the hourly at 1.4170. Activity is quiet but the levels are known and in play.
We will see if the sellers can keep the price below the 200 hour MA/38.2% resistance and if downside momentum can start up again.