Run to the upside stalled near old swing lows from last week
The GBPUSD traded above and below the 100 hour moving average yesterday (blue line currently at 1.35526), with the pair’s high stalling near the 38.2% retracement of the move down from the October 20 high at 1.35803.
After trading above and below the 100 hour moving average in the early Asian session and retesting the 38.2% retracement successfully, the price moved back down to retest the 100 hour moving average and found buyers (see blue line). The successful test of the moving average gave the buyers the go-ahead to push higher and they were able to finally get above the 38.2% retracement level. Momentum took the price up toward the swing low from November 2 and November 3 near 1.3606. The high price reached 1.36063.
The inability to extend above that target started to turn buyers to sellers. Once the 38.2% retracement level was broken to the downside, selling momentum increased and ultimately pushed price back below the 100 hour moving average at 1.35526 and even to a new session low at 1.35434 (below the Asian session low at 1.3547).
The current price has moved back above the 100 hour moving average (blue line) and currently trades just above that level at 1.3556.
Will buyers be all to hold support against the level and rotate back to the upside now that the up and down lap has been completed?
That is what traders will focus on now. A move below the 100 hour moving average, however, should lead to more downside momentum on a break of the days lows. Conversely stay above and get back above the 38.2% retracement, would give buyers more confidence for another test of the highs for the day and potentially the 200 hour moving average at 1.36225 and the 50% midpoint at 1.36286.
On the downside, the 1.3531 was a swing low going back to October 4. Below that and a another swing area between 1.3515 and 1.3520 would be the next target area
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