Test for the bulls/bears
The GBPUSD is up testing the 50% of the last bearish leg down. That move started on July 26th at 1.32126 and moved to a low of 1.26612 (551 pips - see chart below). The 50% is at 1.25369. The high today has reached 1.29355 - just below that level. We have backed off that level and trade at 1.2917 currently. There is a stall.
The thing about the correction is that the 50% is just of the last trend move lower. That move took the price below a lower trend line on August 9 and the price stayed below that line until yesterday. So buyers took back some control on the trend line break failure.
Having said that, if the buyers are to take more control, getting above the 50% of this move is just the minimum. The big picture has the pair moving down from much higher highs. This is just that last leg lower.
So if the buyers are trying to bottom the pair, the 1.26369 is a hurdle that needs to be busted.
Drilling to the 4 hour chart below, the 100 bar MA (blue line) comes in at 1.2876. The low today did move below that level but failed/stalled. A move below that level would sour the mood of the buyers and should solicit more selling.
Taking a look at the 5-minute chart below, the 1.2898-1.2902 is home to the 200 and 100 bar MAs. The 50% of the day's range and swing levels are in that area too. That is a closer risk level that would make the technical picture (at least on the day) not look so great....
