GBPUSD has a volatile down and back up day. What next?

The GBPUSD has a volatile down and up day. In the European session, the price fell sharply on the back of weaker UK PMI flash data. That move to the downside to the price below its 100-day moving average, but the momentum could not take the price below the low price from last week.

After bouncing off of that support, the price action gained momentum when the US flash PMI data came out weaker than expectations. Fast break the other way

The move to the upside saw the price move back toward the closing level from yesterday near 1.2732. In the US session, the high price reached 1.2732.

At the US session high, the price also extended above the 200-hour moving average at 1.27218, but fell short of the 100-hour moving average 1.27357. Needless to say, it was a good level to stall the rally. The price is currently trading just below the 200-hour moving average at 1.2717. In doing so, it is keeping the sellers in play, and more in control at least in the short term.

What next?

As we head toward the new trading day, what happened today will be forgotten tomorrow. What we do know is the prices back near the middle of the trading range with the 100 and 200-hour moving averages back as the barometer for bullish above bear’s below.

Also, yesterday the high price stalled against the high of what has been a trading range over the last 3 or so trading weeks. Today the price low stalled against the low of the trading range over the last 3 or so trading weeks. The range was covered in 2 days of trading.

At some point, the price will break out of the “red box” that has confined the trading range. However, it was “not to be” today. Nevertheless, traders will be watching for the break outside of the “red box” at some point, and hopefully, that will be accompanied by momentum in the direction of the break.

This article was written by Greg Michalowski at Source