Pair falls back below 100 hour MA, 200 day MA and 200 hour MA
The GBPUSD has stepped lower in trading today, helped by breaks of key hourly and daily MAs in the process.
Looking at the hourly chart above, the pair initially fell and tested its rising 100 hour moving average (blue line) at 1.38211 currently. After a corrective bounce off of that level, the selling reemerged, and after breaking below the 100 hour moving average and the overlaid 200 day moving average at 1.38138, selling intensified.
That move back to the downside saw the pair moved below a swing area between 1.3790 and 1.38022, and then the rising 200 hour moving average of 1.3783. The 38.2% retracement of the move up from the August 20 low was also near that will level.
The price is currently testing that 200 hour moving average. A move above the 200 hour moving average could see some slowing of the downward momentum but overhead resistance still remains near the 1.38022 level (top of the swing area- see red numbered circles).
Taking a broader look at the daily chart below, the low price in the month of August stalled ahead of the low price from the month of July. The subsequent rally off the August low, took the price back above the 200 day moving average last week. However that break could not sustain momentum up to the 100 day moving average at 1.39155 (blue line in the chart below). The high price reached 1.38912 on Friday.
The subsequent fall back below the 200 day moving average (green line) is a more bearish play as the traders react to the failed move above that moving average level.
It will take a move back above the 200 day moving average -and ultimately 100 day moving average – to tilt the bias more to the upside for the pair on the daily chart. Failure to do that, and, the tilt is negative versus the moving averages.