2018 low came in at 1.2453
The GBPUSD traded below its 2018 low at 1.2453 for the 2nd week in a row, and barring a sharp fall today, the pair will fail on that break for the 2nd week in a row.
Last week the low reached 1.24378. This week the low got all the way down to 1.23815 on Wednesday before bouncing (helped by better retail sales on Thursday) and the dollar selling on the back of the William’s comments.
With two shots at going lower and two fails, traders may tilt short/intermediate term bias more to the upside (i.e., look for a dip to buy) with stops on a break back below the 1.2453 level.
Where is support?
Drilling to the hourly chart below, the pair is approaching support at the 200 hour MA at 1.24938 level and the 100 hour MA at the 1.24715 level.
If you recall from yesterday, the pair moved up to 1.24968 just above the 200 hour MA, retraced to the 100 hour MA (blue line) before the run higher on the William’s commnets. IN between sits the swing low from July 4 at 1.24805.
The pair currently trades at 1.2506. The low for the day just reached 1.2494 — just ahead of the 200 hour MA.
It’s Friday and new positions may not be the best idea, but into trading next week, I would look toward the 100 and 200 hour MAs to be a support level for buyers with the idea that 2 failed shots to go and extend lower (below 2018 lows at 1.2453) is enough, and that the «market» may look to explore the upside instead. Much will depend on the support against the 100 and 200 hour MAs.
On a move to the upside, the obvious hurdle is at the 100 bar MA on the 4-hour chart at 1.25484. In the run higher yesterday and also today, that MA stalled the rallies. It will take a move above to give the dip buyers some added confidence (but likely not until next week).
Of course, the pound has a lot of hurdles on the road ahead with Brexit. The price action will reflect the good and the bad. However, from the two chances in the last two weeks, the sellers certainly had their shot and they missed. Do the longs look to take a shot now? Watch the support levels but respect them too. Moves below are the risk.