The GBPUSD has moved to yet another 2022 low, and to the lowest level since July 2020. The price just reached 1.24148, taking out the earlier low at 1.24204 reached just a few hours ago.
Looking at the daily chart above, the move to the downside today has now cracked below the 61.8% retracement of the range since the March 2020 low (see post yesterday "GBPUSD looks toward the 61.8% retracement of the move up from the 2020 low").
That retracement level comes in at 1.24936. The low price yesterday stalled just ahead of that level before rebounding modestly into the close (closed at 1.25448). The retracement level is now close risk on the daily chart. Getting back above it is the minimum requirement to give buyers some hope from that medium-term perspective.
The GBPUSD has been down for six consecutive days. Over that time period, the price moved from a high of 1.3089 to the low today of 1.24148 (so far). That's a trend move of 674 pips in six trading days. In the process, the pair moved below the 50% retracement level and swing area near 1.28788, another swing area between 1.2634 and 1.26737, and the 61.8% retracement level today at 1.24936.
Break. Break. Break.
Drilling to the 5 minute chart below, although the price has been trending to the downside, the buyers had their shots over the last couple of days to tried to take back some short-term control.
Of note today, is that the low price earlier today took out the low price from yesterday, but could not sustain momentum on the price move back above the 100/200 bar moving averages (blue and green lines in the chart below) near 1.2534. The intraday high price reached 1.25691, however, momentum died the price moved back below those moving averages.
The buyers turned to sellers once again and moved to new session lows.
Yesterday there were a few moves above the 200 bar moving average only to have the price action fail as well.
In a trend move, getting above those shorter-term moving averages - and staying above - are key. Trend moves can give countertrend traders some false hopes (like today's price action), but if they fail, there is a quick exit strategy. That is exit is simply on the failures.
REMEMBER....The countertrend traders in a trend move ALWAYS have to show that they have power and can keep power. Failures are not tolerated, and actually fuel the trend traders even more.
