Narrow trading ranges so far today
The GBPUSD is breaking to a new day low as the 4 PM London fix approaches (11 AM ET). The price is trading at 1.38464. That as extended the trading range for the day to about 50 pips which is still well short of the 91 PIP average over the last 22 trading days (about 1 month of trading). There is room to roam.
The GBPUSD has been more reluctant to follow the dollars move higher since the employment report. Having said that, the price did break below the 100/200 hour moving averages on Friday, and the corrective move higher today did stall ahead of those moving averages. The 100 hour moving averages at 1.39029. The 200 hour moving averages at 1.39099. The high price could only reach 1.39938 today. Stay below those moving averages the sellers are more in control (and also gives them more confidence).
What now?
Although lower, the price of the GBPUSD still remains above the 38.2% retracement of the move higher from the July 22 low. That retracement level comes in at 1.38255. Near that area sits swing highs going back to July 26 and July 27 between 1.38287 and 1.38323. Move below the 1.38255 to 1.38327 area would increase the bearish bias. The 38.2% is also the minimum downside retracement target if the sellers are to continue to take back more control..
What would seller now not want to see in the short term?
The swing lows from August 2 and August 5 came between 1.3871 and 1.38761. Stay below those levels and the sellers are happy. Move above, and there should be more upside momentum on the selling disappointment.