Tests 1.3100/38.2% area
The GBPUSD went up and up and up on Friday. Today with all the global anxiety from the Pres. Trump tweet and Brexit angst, the pair has given up some of the gains. Looking at the move higher from Friday, the pair has corrected towards 1.3100 (the high on Friday extended to 1.3175) and trades above and below the 38.2% of the move higher at 1.31014. That is also near the high form May 1.
The 50% midpoint of the move up comes in at 1.30782 (which is also near the high from Thursday’s trading) and would be a target on the downside.
The 100 hour MA is still looking to catch up to the price and is down at 1.30617. All those levels are potential downside targets if the sells keep the pressure on the pair.
Risk for shorts now comes in at the 1.31190-21 area. Looking at the hourly chart above, there were a series of swing highs in that area going back to April 5 (see red numbered circles). On Apirl 12, the price moved above that area but came back below and retested on April 15th. It wasn’t until Friday before the price was able to get back above. The price is moving away from that level now.
As I type, the GBPUSD is moving lower away from the 1.3100 level and looks toward the 50% target at 1.30787 (and high from Thursday). The 1.31014 can now be a close risk level for shorts with the rising 100 hour MA at 1.30617 looking like a doable downside target. Get below the 50% though.