Two tests today.
The GBPUSD raced above its 100 day moving average on Friday and continued that rally in trading yesterday. However, when the price reach 1.3200, sellers leaned against that level. The swing highs from January at 1.3207 and 1.3211 were also a reason to lean (see chart below). Staying on the daily chart below, the pair has support at its 100 day moving average currently at 1.2988. The low price today is well off that level at 1.3016 area, but keep that level in mind on further downside momentum today.
Drilling to the hourly chart below, before getting to that 100 day moving average, the price has to get and stay below the 38.2% retracement of the move up from the February 28 low to the high price reached yesterday. That retracement level comes in at 1.30183. The area is also defined by swing highs from February 19 and February 25 in the 1.3018 to 1.3022 area. The low price today reached 1.3016 and again at 1.30175 more recently. There part 2 tests which increases the levels of importance going forward today. We currently trade at 1.3027.
If the price is to continue lower and test the 100 day moving average at 1.2988, getting and staying below the 38.2% retracement level will be needed. If the price can't extend below that level, we could see a rebound back higher. Watch the 1.3062 to 1.30692. Get above would give buyers more confidence (see green numbered circles in the hourly chart above).
