Declines from Friday and Monday are being retraced
The GBPUSD fell on Friday and the Monday. The fall to the downside took the price close to the 50% retracement of the move up from the December 21 low at 1.34448, and bounced. The move back above the swing area (see yellow area in the chart below) at 1.35212 to 1.35347 tilted the bias back to the upside in trading today (see post from yesterday). Also helping the buyers technically, was the move above the 100 hour MA (blue line currently at 1.35594) today.
The price has moved up to - and through - the 200 hour MA (green line) currently at 1.3590, but ran into resistance finally against the downward sloping trendline currently at 1.3601.
It will now take a move above that trend line, to tilt the bias even more to the upside today. A full retracement of the move down from Friday's high would have traders targeting the high at 1.36349.
Should the trend line stall the rally, the risk for longs now would be a move back below the 100 hour MA at 1.35594. Move below, and then get below the key swing area (yellow area) and sellers are more and more in control again.
