The GBPUSD early today extended swing lows from Tuesday and Wednesday and yesterday between 1.3080 and 1.3087. The price eventually rotated to a new low going back to November 6, 2020 at 1.30502, but could not sustain momentum.
The corrective move higher help by the Putin headlines earlier today, push the price back up. However once the price reached the 100 hour moving average at 1.3124, the buyers turned to sellers. The prices now trading back below the aforementioned swing area between 1.3080 1.30876 and trades to a new New York session low at 1.3065.
The swing area is now close short-term resistance. Stay below is more bearish.
More conservative risk for sellers (and the sellers ARE trending this pair to the downside) is the falling 100 hour moving average (blue line in the chart above).
Holding below that level today on the correction higher, increases the levels importance going forward.
Admittedly, the price traded above and below that 100 hour moving average during yesterday's trade, but reestablishing the level today is a significant technical move.
Going forward, if the price were able to get above the 100 hour moving average there should be more corrective probing that would target the swing highs from yesterday near 1.3190, and the falling 200 hour moving average 1.32189 (green line). The price has not traded above the 200 hour moving average since February 23 (12 trading days ago).
Since that time, the price has moved down from 1.35762, to the low today at 1.30502 or 526 pips. That's a pretty good move.
Is the price oversold?.
Probably, but holding the 100 hour moving average keeps the sellers more control.
Also trend moves tend to go further than traders expect. This has been a trend move lower.
So get above the 100 hour moving average, and we can talk about being oversold and look for more corrective upside momentum....
