GBPUSD falls to 1.2100 today
The GBPUSD fell to a low of 1.2100 today. Those round numbers can be tough to crack, especially after a 5 day journey that saw the price move from 1.2516 to 1.2100. That’s 416 pips in 1 week of trading.
Also, if you look at the weekly chart, the 1.21085 level was a swing low all the way back in March of 2017 AND a lower trend line cuts across at 1.2115. The combination of 1.2100, 1.21085, and 1.2115 (and 416 pips) is giving sellers cause for pause. We trade at 1.2127 currently.
Can we still go lower?
Yes… trends are fast, directional and can go further than we expect and think. Looking at the hourly chart, the correction off the low from Tuesday took the price up about 130 pips, but it still came up short of the 38.2% of the move down. So if buying, be careful.
When there is a crossroad, where a bottom or top may be in place, you need more confidence. What would do that?
Giving the buyers more confidence would be a move back above (and stay above) the falling 100 bar MA (blue line in the chart below) on the 5 minute chart. That comes in at 1.21459. PS it is also a swing level from yesterday’s price action….A move above would be more bullish. If the price can get above that level, buyers would feel better.
PS it goes both ways…. Sellers will still hold all the cards if the price can’t get to, or surpass those levels, and remember, don’t mess with a break lower too.