The GBPUSD has been the most rambunctious of the major currencies pairs of late. The average trading range over the last month of trading for the pair has moved from 65 pips in summer (when volatility was unusually low) to the current 116 pips. That average trading range is leading the major currencies. So it has been the most volatile. Not today. The range for the day is at a low 43 pips.
The GBPUSD average trading range has increased steadily since September.
Do we have a chance for an extension? The answer is “Yes”.
Now I do not expect 116 pips. No. That would seem to be a stretch. There is no economic releases in the US today. Activity is counter trend for the most part, and the pair also has a pretty good ceiling at the 1.6000 level to get above if the pair is going to follow the USD trend seen so far in trading today. That seems to be an issue. In fact, the pair just extended the range with the price making it to 1.5996 – just short of the 1.6000 level, and the price is back down to days midpoint at the 1.5974 level, suggesting the 1.6000/10 level is remaining steadfast for now (the level is the 50% of the move up from the 2012 low to the 2014 high and also where the 200 week moving average is found -see chart below)).
GBPUSD has tough resistance at the 1.6000-10 area.
Looking at the 5 minute chart below, it shows the markets non trending activity today. The pair is currently back down testing the midpoint of the days range and the 100 and 200 bar MAs. So we are right at the tipping point for the pair. If the price is going to extend the range to the upside today, this is the place to buy. If the price is going to extend the range to the downside, this is the place to sell.
Which way are we going to go today?
Honestly this trade is really tough one.
- We just failed to get above the 1.6000 level – Bearish
- The activity is more countertrend today – Bullish
- We are below the 100 bar MA on the 5 minute chart and dipped below the 200 bar MA – Bearish
- We are higher on the day (1.5968 close) – Bullish
The choice? I am long at 1.5979 but only small and if the price goes below 1.5968 level, I am out. I may be forcing something on a Monday morning but the time seems right. If the price can get above the 1.6000/10 level that would be good but I will be watching stop and watching 1.6000 level as well.
GBPUSD tests the days midpoint