The GBPUSD has been chopping to the downside over the last week or so of trading. The move lower on Friday saw the GBPUSD price move to the lowest level since November 2020 after breaking below the March 14/15 low price near 1.2999 (call it 1.3000). The low price extended to 1.2981 on Friday but snapped back to the upside.
To start the week yesterday, the GBPUSD price made another run to the downside and once again moved below the 1.3000 level (the low reached 1.2988). However, the momentum faded and the price snapback higher for the 2nd consecutive day.
Today, a third attempt below 1.3000 was made. This time the low could only get to 1.29928 before the price started to move higher. The CPI data subsequently gave the pair an extra kick to the upside.
That move higher today has seen the price move back above its 100 hour moving average at 1.30461 currently (blue line in the chart above). However, like last Thursday, the move above the MA found sellers.
The current price for the GBPUSD is just below that 100 hour MA at 1.3043.
Needless to say, a move back above the 100 hour moving average with momentum is desperately needed to give the buyers some added confidence. On a break with momentum, the falling 200 hour moving average would be the next key target/hurdle. That level currently comes in at 1.30794 (green line in the chart above).
Last week the price tried to get above that moving average only to stall near the swing high from March 31. With the price lower now, there are other hurdles ahead of those swing highs (see red numbered circles in the chart above).
Traders, are trying to be constructive on the upside in the GBPUSD largely as a result of the failed moves lower below the 1.3000 level. It is always tempting to try to find a bottom after a move lower. However, is also important to get comfort from breaking levels on corrective moves opposite the dominant bias.
So although sellers had their shot three days in a row below 1.3000, the buyers still need to prove that they can take control above higher technical levels including the 100 hour moving average. If they can't, they are still not winning and the sellers can move the price back to the downside.
Watch the 100 hour MA. That will be key going forward from here.