The GBPUSD has continued it’s reversal to the downside, and it now trades below the low from Monday and the low from Friday. The pair is trading at the lowest level since March 29. That development comes after taking the price up around 53 pips into the NY high. Since then the price has reversed 96 pips lower.
Technically, the price fell below both the 200 and 100 hour moving averages (green and blue lines in the chart above), but stalled near the close from yesterday on the first move to the downside in the NY session. The subsequent bounce off of that low worked its way back between the 100 and 200 hour moving averages (blue and green lines), but stalled within those MA levels and rotated back to the downside.
The next hurdle to the downside was to get below the upward sloping trendline on the hourly chart near 1.3100. That level was broken and then the price moved below the low price from Friday and on Monday between 1.30825 and 1.30853.
That swing area has now been broken and is now close resistance/risk for sellers looking for more downside. If the price can stay below that swing area and more conservatively 1.30922 (another low price from yesterday), sellers would be more confident that the downside is “still on”.
Swing lows from March 29 at 1.3059 and 1.3049 are the next downside targets. Get below the lowest of those two levels, and the pair would be trading at the lowest level since March 16.
Taking a broader look at the daily chart, the last seven trading days have been able to stay below a swing area between 1.31588 and 1.31868 (see yellow area on the daily chart below). The price also stalled near the 38.2% retracement of the move up from the March 2020 low. That cuts across at 1.3164. Staying below that area, gives the sellers more ammunition/confidence for a continuation to the downside. The low price from March and for the year came in at 1.29987 – call it 1.3000. The natural support level would likely give traders more cause for pause seeing it held support once already this year.