The GBPUSD dipped below its 200-hour moving average during the European session but rebounded into the US morning. That recovery, however, ran out of steam ahead of the session highs.
When price rolled back below the 200-hour MA (1.3521) and then the 100-hour MA (1.35125), sellers reasserted control and downside momentum accelerated.
The pair extended to a session low of 1.3445, testing the rising 200-day moving average at 1.34448 — a key technical level.
That’s where buyers stepped in.
It’s worth noting that last Thursday and Friday, the price briefly traded below the 200-day MA on several hourly bars, but downside momentum faded quickly and the pair rotated higher. Today, buyers were clearly waiting at that level and defended it more aggressively.
Now the 200-day MA becomes the line in the sand.
Key levels going forward:
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Support:
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1.3445 (200-day MA level)
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1.33926 (100 day MA level)
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Resistance:
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1.3488 (lows from yesterdya)
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1.3512 (100-hour MA)
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If the pair holds above 1.3488, buyers can refocus on reclaiming the 100-hour MA and shifting short-term momentum back higher.
Conversely, if sellers lean against 1.3488 and force a break lower, another test — and potentially a break — of the 200-day MA would be likely.
This article was written by Greg Michalowski at investinglive.com.