A look at the GBPUSD pair
The GBPUSD is moving toward the June low at 1.37856. The low today reached 1.3813. Yes, we are still 28 pips from that level, but getting closer.
Taking a broad look at the daily chart, relatively speaking the pair remains confined in an up and down trading range going back to February from 1.3668 to 1.4249. That sounds wide but the 585 pip ranges is about 37% of the range from the September low to the February high (1579 pips - green box in the chart above). Relatively speaking, the price action is sideways and consolidating near the high.
What we know from the price action is the highs seen in May moved up to test the February highs and found willing sellers. Also the most recent high from last week, stalled at a lower swing area between 1.3999 to 1.40167 (see green numbered circles). The price has also dipped back below the 100 day MA at 1.39483 (blue MA line). That MA is a risk level for shorts now on the daily chart. Stay below is more bearish.
The pair is approaching a swing area between 1.3757 and 1.3799. The June low is between those levels at 1.37856. Get below and "the market" will be eyeing the March and April lows near 1.3668.
The tilt off the daily is to the downside.
- The high in May stalled near the high for the year
- The high last week stalled against a lower swing area
- The price is below the 100 day MA
Those are steps in the bearish direction.
What would spoil that bias?
Holding support at the June lows and the swing area down to 1.3757 and then moving back above the 100 day MA.
Drilling to the hourly chart below, the price action yesterday saw the pair testing the 100 and 200 hour moving averages. There was a brief break above the 200 hour moving average, but that was quickly reversed.
Today, the price move below a swing area between 1.3853 and 1.38708 ( see red numbered circles). Stay below that area and the shorter-term bias remains more to the downside today.
The price low did dipped below swing highs off the low from June 18 and June 21 between 1.3828 and 1.38316. The price has been trading above and below that level over the last three hours. The market is debating whether to make a run for the June lows.
Overall, the sellers are making the play on the daily and the hourly. There is work to do to increase the bearish bias, but for now they are more in control.