The GBPUSD is trading to a new swing low and new week low at 1.3018. The move takes price to the lowest level since March 15. The swing low for the year reached 1.29987 on March 14, and a near identical level of 1.2999 on March 15 (call it 1.3000). The natural support level and low for the year is the lowest level going back to November 5, 2020.
Drilling down to the hourly chart below, the swing high for the week came in on Tuesday after the price of the GBPUSD extended above its 200 hour moving average (green line in the chart below), but found willing sellers against the high price from last Thursday near 1.31689. The price rotated back below the 200 hour moving average and stayed below that level for the rest of the week.
During yesterday’s trade, a spike high retested that 200 hour moving average but found willing sellers against it (and also the high price from Wednesday) near 1.3107. The inability to move above the 200 hour moving average gave the go-ahead to the sellers to retest the lows.
In trading today, the Wednesday and Thursday swing lows were broken, and although the price waffled above and below those lows before the last move to the downside, the sellers have not wavered and remain in control.
What would jeopardize the downside now?
Moving back above the swing lows from Wednesday and Thursday up to 1.3049 is close risk. Traders would not like to see a rebound above that level given the break lower today. A move above would have traders looking back toward the falling 100 hour moving average (blue line) at 1.30848. Yesterday the price briefly moved above that moving average only to stall ahead of the 200 hour moving average (green line).
On the downside getting below the 1.3000 level – and staying below – is the obvious next target. Could there be willing buyers against the level? Of course. The buyers will be eyeing that level for profit/dip buying opportunities too (with stops below).. Sellers will be hoping for a break and run lower of course.