The GBPUSD is trading to a new session high in the process is testing a swing area between 1.3521 and 1.35282.
That swing area comes ahead of the extreme reached on the last trading day of December at 1.35496. At high price from Friday, the pair got close to the falling 100 day moving average (currently at 1.35561 - overlaid blue line).
The inability to stay above that swing area and get above the 100 day moving average, took the price lower on the first trading day of the year yesterday. That move lower did extend below the 100 hour moving average (currently at 1.34928) and the 200 hour moving average for the first time since December 22 (green line) currently at 1.3455. However, the break of the 200 hour moving average failed and the price corrected up toward the 100 hour moving average into the close yesterday.
Today the price initially rotated lower before restarting the move higher. The New York session has seen the price move up to the new day high and a retest of swing area ahead of the extreme.
What next?
The sellers have so far been able to hold against the swing area. Often times, a level is broken, and new high is made,, but fails against resistance (100 day MA) and rotated lower - reestablishing the the lower swing area.
It will take a move above that swing area to increase the bullish bias with the 100 day moving average as a key target.
PS the price is now extending above the aforementioned swing area and looks toward the high from December 31 at 1.35496 along with the falling 100 day moving average at 1.35561. The last time the price traded above its 100 day moving average was back on October 29. Back in October the price traded above the 100 day moving average on seven separate occasions (with two closes above the line). However momentum cannot be sustained (nor the 200 day MA reached).
As a result selling returned in November with the price bottoming in December near 1.13588.
Looking at the daily chart below, in addition to the 100 hour moving average the pair will be looking toward the 38.2% retracement of the move down from the June 2021 high at 1.35754 along with swing area between 1.35608 and 1.3601.
