The pair chops to the upside
The GBPUSD fell last week and in the process the price fell below a lower trendline and stay below (see green numbered circles).
The price on Friday fell to the lowest level since September 9 and at that level tested both the 50% retracement and the 200 bar moving average on the 4hour chart (see green overlay line on the hourly chart above). Holding that level led to a modest correction higher, before moving back lower into the weekend close.
Today, the price was able to stay above the rising 200 bar moving average on the 4 hour chart.
Admittedly, the move to the upside today is choppy with plenty of up and down price action. However, the price to correct higher.
Should the upside momentum continue, the underside of the broken trend line at 1.2350 and the 100 hour moving average at 1.23614 (and moving lower) would be targets. Failure to move above those levels, would solicit more selling.
Needless to say Brexit uncertainty continues to influence the price action in this pair. Can there be a deal? Will Boris Johnson be forced to ask for an extension? Or will the UK Brexit one way or the other on October 31?
What we know from the technicals, is that the 50% and 200 bar moving average held on Friday. That is a level that will help to define the bias. For bulls, stay above is more bullish.
On the topside, the 100 hour MA will be a key barometer for the sellers. Stay below it, and the sellers can continue to hold the best hand.