Completes an up and down lap
The GBPUSD just completed a lap - the low from earlier in the day, led to a sharp rise. That rise has been reversed and the low was once again tested - completing the "lap". We are seeing a bounce off that low.
The action describes a market that is trying to "find itself". Don't we all sometimes need to do that ; ) .
Technically, near the lows there is an old trend line that worked, then was broken on on Tuesday and did not work, then started to hold support again yesterday (follow blue circles in the chart above).
The last two tests on the hourly chart above, moved a bit below the line (see red areas) but remember the market is trying to "find itself". It just does not trust....yet that is. There has been rebounds on those little failed breaks....
Also near that level is the 50% of the move down from last weeks high (at 1.2330) to this weeks low (at 1.2082). That level comes in at 1.2206. I guess you can add the fact that the lows are at 1.2199 and 1.2200 suggests that there is something against that big figure level (i.e. 1.2200 - Options?) as well.
On the topside, coming into the day (and during the early hours), the 1.2242-487 area (yellow are in the chart above) provided a ceiling. In the London morning session there were two spikes above, and each failed. Each failure, ended up starting a move lower. I will continue to define that yellow area as a level to get and STAY ABOVE, if this pair is going higher. Be aware.
So for traders the idea is get below 1.2200 or get above 1.22429-487 (or buy the support and sell the resistance). In between the Dr Jekyll and Mr Hyde market personality will likely prevail as it tries to find itself (bullish or bearish?)/