Topside trend line stalls the rally
The GBPUSD is moving back lower, after a topside trend line at the 1.3635 level stalled the rally.
The price rotated lower and and is now down retesting the 100 and 200 hour MAs at 1.3593 and 1.3582 respectively.
For the week the pair reached it’s high on Monday at 1.37028. The low was yesterday at 1.35313. That was near lows from Wednesday at 1.35347 and the low today at 1.35377.
The 1.35212 to 1.35347 area represents a swing area going back to December 24. That would be the next downside target on more selling. Below that, the 38.2% of the move up from the December 21 low comes in at 1.35057.
Overall, the price action this week is indicative of a market that is digesting. The pair is still above the high from 2019 at 1.35139, and trades at highest levels since May 2018.
Taking a broader look since the 2014 high, the pair is trading around the 38.2% of the move down from the high of 2014 to the low reached in 2020. That level comes in at 1.35077. Today, the price traded above and below that level. If the buyers are to take this pair higher going forward, getting and staying above the 38.2% – and staying above – is a minimum retracement target (to get to and through). Getting above, opens the door for more upside probing. Failure, and the correction is just a plain vanilla variety.