The GBPUSD tests a swing area on the downside and bounces

Technical Analysis

1.2706-16 a bias level for the pair

The GBPUSD is lower today, falling to a new low for the day in the last hour or so.  That low did enter a swing area defined by the 1.27067-159 area. The low reached 1.27105. Yesterday the lows came in at 1.27085 and 1.27195.  Looking at the chart, if the buyers are to remain in control look for them to defend that area. A move below will then look toward the 100 and 200 hour MAs at 1.2677-81 (blue and green lines). 

Now is it all bullish for the pair?

The GBPUSD has been steadily moving higher since the flash crash last week with 3 straight days with higher closes.   However, today that string is in jeopardy as the high today could not get to, and through last week’s high at 1.28133 (high stalled ahead of the 1.2800 level at 1.27965).  The price closed at 1.2773 yesterday.  So there is some apprehension to take the pair too high with the Brexit clock ticking.

However as per Adam’s post HERE, Soc. Gen is keeping upside potential alive.   If there is good news they argue that the pair has lots of upside room to roam.  

Looking at the daily chart below, the price action is trying to bottom (the flash crash made new lows since April 2017, but that break quickly failed).  The price is above the August swing low and the October swing low. December was an up and down mess and January is off to an down and up start, but if the price momentum can build (i.e. hold the levels on the hourly), getting up to the 100 day MA at 1.2894 is an easy target. A move above open up more upside potential. 

ForexLive

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