Better retail sales ignored today
The UK released better than expected retail sales today but the market discounted the rebound as being a one off. At least that is what the price action suggests. The price did move higher on the headline but quickly moved back lower.
The fall took the price to, and through, the 50% of the move up from the July 12th low (low for the month), to the July 18th high (high for the month) at 1.2970. The 200 hour MA is right at that level too (green line). Momentum on that break took the price to the 61.8% of the same range at 1.2931 where the decline stalled.
The rebound (was it dragged higher from the EURUSD?) has taken the price back to the 50% and 200 hour MA area. We trade above and below the level, waiting for the next push.
Taking a broader view of the pair from the daily chart shows that the highs from last Friday/Tuesday, peaked near resistance area defined by old swing levels (see red circles on the daily chart), the 38.2% retracement of the move down from the June 2016 high (not using the flash crash low as it was highly subjective) and a topside trend line. That area comes between 1.3120 and 1.3143. The high reached 1.3225 before moving back lower.
On the downside from the daily chart, if you go back a year, the 1.2768-1.2812 area has been a swing area (Bullish above/Bearish below). We are a ways away from that area currently but it is what helps to define a lower extreme should the recent high be a high, and we start to move back lower from here.
Going the other way and looking at the 5 minute chart today, the pair tests the 100 bar MA (blue line) at 1.2975. The spike high after the retail sales report earlier also tested that MA line and held. Perhaps an intraday decision time for the pair.
