Consolidation after the trend move higher stalled
The GBPUSD trended higher on Tuesday with little corrections.
Yesterday, the pair consolidated at first and then moved higher. If you read my posts yesterday, the 5-minute chart was telling the “markets” story.
The pair tried to move below the 100 and 200 bar MA (blue and green line) with little momentum, then resumed the trend move higher (see red arrows).
Note that on the move higher, the 100 bar MA (blue line) held support twice, before giving up on the Powell comments. That break below, shifted the bias lower. Buyers turned to sellers. The trend was over. The price moved lower. That is all for your education. In trending markets, the 5-minute chart can write the story. Be aware of what it tells you….
Well trends tend to transition to non-trend and that is what we are seeing today. The 100 and 200 bar MA are moving sideways and converged. The price has moved above and below those MA at 1.3053. The MA lines can be a barometer for bulls and bears today. Move above more bullish. Stay below, more bearish. So be aware.
The low today stalled near the corrective low from Tuesday (after its run higher) at 1.30183. That level is of importance going forward and setting up the buying and selling battle with the MAs above at 1.3053 and 1.3018 below. We currently trade at 1.30446.
Taking a broader look at the hourly chart, the fall today did stall at a lower trend line and a swing line as well that goes back to April 18th (see green circles). I am not surprised that area held support. It also increases the levels importance.
The battle lines are drawn as trader trade the ups and downs in what is non-trending up and down trading. We as trader can only follow along, pick those spots and listen to the price action. Use those lines to define and limit risk on trades and to define the bias.