GBPUSD moved to the lowest level since September 2020 (see earlier posts here). At the same time, the price has been trending lower over the last two trading days and is able to stay below its falling 100 bar moving average on the five minute chart (blue line in the chart above).
The last hour or so has seen the price move back above that moving average. Admittedly, the price is only been able to move about 12 pips above that moving average line. It also remains below the falling 200 bar moving average at 1.27467.
However, is it a small nuance that is a prelude to more upside corrective price action?
Get above the 200 bar MA and traders will look toward the 38.2-50% retracement of the day’s trading range between 1.2751 and 1.27679. Get above those levels and the door opens more for the dip buyers.
Close risk now?
Move below the 100 bar MA at 1.2729, and the idea that the bottom is in place, goes away. The buyers are taking a shot. They need to follow through on the first successful shot above the 100 bar MA.