After running higher and reaching the highest levels since April 2022 at the end of last week, the sellers in the GBPUSD started to lean against resistance near 1.3146 (off the daily char – see video). The price fell yesterday and in the process dipped back below the 100-hour moving average (blue line) and a swing area between 1.30419 and 1.30501.
Today, the GBPUSD continued to move lower in the Asian session ahead of the UK CPI data. That data was lower than expectations and it sent the GBPUSD sharply lower. The initial stop was at the 38.2% retracement of the move up from the end of June low to the July high. That level came in at 1.2931. The subsequent rally saw the GBPUSD move up to retest its 200-hour moving average where it found willing sellers at 1.3072 area.
The subsequent fall has taken the price back below the 1.2900 level to a low of the day of 1.2896. The price is bouncing modestly with the current price trading near 1.2910.
The close risk now for the GBPUSD comes at the 38.2% retracement of the move up from the June 29 low. That level comes in at 1.29309. I expect sellers to lean against that area on a bounce today. Move above and we should see further upside probing of the move down today on some selling disappointment. Stay below, conversely, keeps the sellers more in control at least in the short term.
On the downside, the next key target comes against the 50% midpoint at 1.28658 (see chart below). The level also corresponds with a modest swing area going back to July 10 and July 11.