GBPUSD support now near 1.2400

The GBPUSD moved up to test the 200 hour MA in trading yesterday - closing just above the key level. The price had not closed above that MA since May 3rd, but tumbled back below the very next day.

Today, barring a collapse over the rest of the day, the pair has pushed higher and looks on track for the 2nd close above the 200 hour MA. There should also be more upside probing after the sharp fall that has seen the pair move from a January high of 1.3748 to a low of 1.21543 at the low level last week (around 1600 pip decline).

More specifically from a technical perspective, looking at the hourly chart above, after consolidating over the 1st few hours in the Asian session, the price started to push higher toward the end the session and into the European session. The price moved above the 50% midpoint of the move down from the May high to the May low at 1.23957. It also moved above a swing high ceiling between 1.2400 and 1.24107.

That area -between 1.23957 and 1.24107 - is now a key support/risk defining level for traders looking for more upside probing for the pair (see red numbered circles). That area was initially a low on April 28. Then after breaking below on May 5, it became a ceiling on that day along with swing highs on May 9 and May 12.

The price of the GBPUSD going forward should not move below that level IF the buyers are to start to take back more control after the sharp fall in 2022.

On the topside, other targets include 1.2502, 1.2566 and 1.2601 to 1.26145. The high price May 4 reached up to 1.2637. All those levels are in play going forward.

Taking a broader look at the daily chart, the May high is just a modest bounce off of the range for 2021. If the buyers are to take more control from a longer run perspective, getting above that high in May is a key target. There is a swing area near that level between 1.2634 and 1.26737. Move above that area, and the next target would be the 38.2% retracement of the 2022 trading range which cuts across at 1.27623. That is a minimum corrective target if the buyers are to be serious about the correction, and potentially taking back control from the dollar bulls in 2022 (i.e. the pendulum starts to swing the other way).

So there is a lot of room to probe with the current price at 1.2484 up to the 38.2% retracement 1.27623 if the decline is over and a more solid corrective move is being initiated. However, watch the 1.2400 area on the downside. That level must hold support going forward.

GBPUSD on the daily chart