Swing highs at 1.3745 and 1.37582 stall the rally again
The GBPUSD moved higher earlier in the session. The pair was helped by a resolution to the dispute over vaccine distribution after EU backed off the threat to impose customs inspections on the Irish border.
However, the price moved up to test a key swing area between 1.3745 and 1.37582. Sellers leaned against the level again and the price started move back to the downside.
More recently, the 100 and 200 hour moving averages have been broken at 1.37082 and 1.36956. The lower extreme was broken in the current hourly bar and we have seen extended selling. We are currently trading near the lows for the day at 1.3676.
Stay below the moving averages keeps the bears more in control.
On the downside, the 38.2% retracement of the move up from the January 18 low comes in at 1.3666. Below that and traders will be realigning the 50% retracement and lower swing area between 1.36349 and 1.36385. Over the last trading days there have been 3 attempts to go below this area. Each lasted about 2 hourly bars. So a total of 6 hourly bars have traded below the area over the last 9 trading days. As strong as the ceiling is above, the floor near the 50% retracement level is also strong.
At some point there will be a break and run of one of the extremes. At the moment, the fall below the moving averages has the sellers more in control
