The move lower earlier in the day found support at swing area
The GBPUSD has been mired in an up and down range since May 17. The value area (where most of the trading has taken place ) is between 1.40986 and 1.4219. There have extensions above and below the area, but they were rejected. Ultimately this week, traders will start to look for a break outside the “red box” (i.e. the value area) and stay outside.
The price action today, initially saw the pair move lower and in the process tested the lower swing areas. There is an area between 1.4110 and 1.4115. Below that is the 1.40986 to 1.4103 area. The low price reached 1.41106 and bounced. The price in the early NY trading, has now moved back above the 100 and 200 hour MAs at 1.4147 and 1.41606 respectively. That has tilted the bias more in favor of the buyers once again. Stay above keeps that tilt in place technically.
The next target comes in at the 61.8% retracement at 1.41855 (of the total range since May 17). The 1.41937 to 1.4200 area will be the next target above that area. The high price last Thursday did extend above the that level briefly to a high of 1.4203. Traders would want to see the price get above that level as well (for good), if the buyers are to make the push outside the “red box” this week.
The ups and downs are reflective of the market that is unsure of the next move. The most recent clue today is the support buyers near the lower extreme and the move back above the moving averages. Both actions were more bullish, but in order to keep that bias, stand above the moving averages is imperative. Failure, and the ups and downs will continue as traders give up the most recent “try”.