The GBPUSD trended higher in August taking the price from a low on August 8 of 1.26649 to a high of 1.32659 on August 28. Since then the price has wandered to the downside with fits of bounces along the way. On Friday, the price spiked back up to 1.32377 after the US jobs report but quickly reversed back to the downside. The price has been lower for three of the last four trading days.
The move to the downside today to break below the 38.2% retracement of the August trend move to the upside. That level comes in at 1.30363. Getting below that level shows that the sellers are trying to take more control.
If the price can stay below that retracement level, the sellers are firmly in control. Sellers looking for more downside with a more conservative short-term risk defining level might look for the price to now stay below 1.3051. The high price going back to August 20 peaked at 1.30515. The low price from yesterday reached 1.3048. That area should keep a lid on the pair if the sellers are to keep firm control at least in the short-term.
On the downside, the 1.3000 level Is the next major target. The 200 bar moving average on the four hour chart comes in at 1.29705, and the 50% midpoint of the move up from the August low comes in at 1.2965. All those levels hard downside targets on further momentum.
This article was written by Greg Michalowski at www.forexlive.com. Source