The move back above the 1.2110 area was more bullish for the GBPUSD
On Monday, I did a video where I outlined the “key level” for the week.
That level was the 1.2110 level (you can watch the video here). The level was near a broken trend line on the daily chart. The price did move away from that level on Tuesday, to a low of 1.19578 before rallying back higher on some short covering and hopes that no-deal Brexit would be declining. Yesterday, however, the price did respect the underside of that broken trend line at 1.2110. The high yesterday reached 1.2105 and backed off.
That level on the daily chart, was joined by a swing area on the hourly chart below at the 1.2104-11 (see yellow area a green numbered circles). The combination of resistance from the daily chart and the hourly chart increase the levels of importance.
As a result, when the 1.2110 area was broken today, sellers turned to buyers and the price started to extend further to the upside. The pair also extended above its 100 hour moving average at 1.21227 and the 50% retracement at 1.21334 (see hourly chart). More recently the price moved above its 200 hour moving average (green line) at the 1.21816 level. Traders are so far using that level as close support. A momentum move below would take some of the bullish steam out the market today. Stay above keeps the bulls in control.
What is the next key level above?
Going back to the daily chart, there is a trendline that cuts across at 1.2244 today (see daily chart above). The high price today has so far reached 1.2219. If that level is broken, the market will be looking toward the 38.2% retracement of the move down from the June high which currently comes in at 1.2273.
So overall buyers to charge above that key level today. However, there is work to do if this move is to morph into something more than a correction including stay above the 200 hour moving average, and moving toward top side trendline and the 38.2% retracement on the daily chart.