Last week, the price dropped for 5 consecutive days. This week, 2-day rally followed by 3 days less
The GBPUSD is working on its 3rd day with cents decreases peaking Tuesday evening at 1.22954.
Recall that last week, the price dropped for 5 consecutive days. On Monday, the GBPUSD opened lower in the Asian session, but near a lower trend line. Maintaining this level helped trigger higher corrective action when risk flows dominated.
Technically, the price could have exceeded the moving averages of 100 and 200 hours (blue and green lines). However, Tuesday and Wednesday highs began to sell against the 38.2% retracement of the drop from the April 30 high (at 1.22905). The inability to exceed this minimum retracement level began to paint a simple corrective move for the pair. The sale resumed.
The low price today reaches 1.2160 or 135 pips from the top. It was also able to drop below its midpoint by 50% of the week’s trading range to 1.21842. There have been trades above and below the 50% level in the past 7 to 8 trading hours, but so far there has been no hourly close above this level. (sellers retain more control).
On more weakness, the 61.8% retracement of the week’s trading range at 1.21579 is the next target followed by a channel trend line currently below 1.2133 (and moving lower) .
If the upward momentum comes back on a move above the 50% retracement, the broken 38.2% retracement of the week’s trading range at 1.2210 is joined by a trend line from the upper channel. . The 100 and 200 hour AM will also be observed. Staying below these levels keeps the trading bias tilted downward.