The GBPUSD is trading in a narrow up and down range ahead of the FOMC decision later today. The range is only 32 pips. That is well below the 75 PIP average over the last 22 trading days (range is 42% of what is normal).
The high price extended to 1.3522. That took the price within a swing area between 1.35213 and 1.35287. Near the high of that swing area is the falling 100 hour moving average at 1.3529 and the 100 day moving average at 1.3530.
The convergence of all those three levels are helping to put a lid on the pair ahead of the FOMC (at least for now).
It will also help define a key bias/risk level to - and through - the FOMC decision. Stay below and the sellers are more in control. Move above and those sellers could easily turned to buyers.
Traders like to have a level/area that is of technical importance and gives a clear picture for the bias - especially through a key event/release. The 1.3521 to 1.3530 will be that area today through the FOMC decision.
On the downside today, the low price stalled near 1.3489. Going back to January 6, the 1.3489 to 1.34988 area has been home to swing lows and highs (see red numbered circles).
Move below would increase the bearish bias and have traders looking toward the 50% midpoint of the move up from the December 20 low at 1.34603.
What is the daily chart saying?
Taking a broader look at the daily chart below, the price rise in January took the price to - and through - the 200 day moving average on two separate days. The price also moved above the 50% retracement of the move down from the June 2021 high. Both those breaks failed.
Failing above those key technical levels turned the buyers into sellers with the price subsequently moving back below a broken trendline and the 100 day moving average (increasing the sellers control).
So sellers have assumed more control.
Getting back above the 100 day MA, the broken trend line and the 38.2% of the range since the June 2021 high at 1.35754 would all be needed to shift the focus back in the favor of the buyers. Absent that, and the downside is favored as the sellers keep control. Keep those levels in mind through the FOMC decision today and going forward.