Sellers broke lower but the selling did not last long
The GBPUSD continued the down side run after another bounce off a lower trend line in the Asian session (see red circle 6), finally gave way. The price fall took the price through the recent lows going back to January 14th to a new low for the year (back to December 26). That fall was short-lived. The breaks FAILED, and the buyers jumped in on the move back above the broken trend line at 1.2981.
The move higher has seen the price retrace toward the 38.2% retracement at 1.30428. Also on the topside is a cluster of moving averages including the 100 and 200 hour moving averages both converged at 1.3066 and the 100 bar moving average on the 4 hour chart at 1.30513 and the 200 bar moving average on the 4 hour chart at 1.3066 (once again). That area (yellow area in the chart above) is a formidable target to get to and through. It should not be easy.
That may be why we have seen early sellers against that area on the run higher (the high reached 1.3046 so far today.
So although the buyers are "giving it a go", there is a lot of upside resistance to get through. That may keep a lid on the pair and have traders rotating the bias back lower.
PS. Watch the 1.30268 area for clues. Get above, may be give the buyers more hope. Stay below would not be so great for the longs.
