Swing area between 1.3745 to 1.3758
The GBPUSD earlier this week, broke below a key swing area between 1.3745 and 1.37582 (see red numbered circles on 4 hour chart below).
That area goes back to January and early February of this year. On February 9 when the price broke higher , it led to a trend move higher that reached its peak on February 24 at 1.4240.
The price has rotated lower over the last month or so of trading. The previous three weeks had highs between 1.3998 and 1.40167. On the downside, the low over that time period was between 1.3778 and 1.38083.
This week, the pair trended lower falling below the 3-week low area (between 1.3778 and 1.38083 -see blue numbered circles) and then the older swing area from Jan/Feb) between 1.3745 at 1.3758. The low stalled ahead of another swing area between 1.3610 and 1.36296. The low price reached 1.36699 today.
The correction higher in the London /NY session has seen the price move back toward the Jan/Feb swing area. The high price reached 1.37406 – about 5 pips from the low of that swing area. Traders who have been getting on the short side this week on the breaks, would want to see that area hold resistance. Move back in that area and the traders start to question the break into the Jan/Feb lower swing area. So far, the area is holding.
Drilling down to the 5 minute chart , the corrective action today has seen the price trade back above the 100/200 bar MAs. The last dips did find support buyers against those levels. So intraday, there is some buying support.
A move below those MAs should see those dip buyers reevaluate the buys/trade. However, holding, keeps them in the game with hopes toward those aforementioned resistance levels from the 4-hour chart.
A battle is on technically with the intraday traders making a play from the long side, while the intermediate traders leaning against the overhead resistance levels. The battle lines are defined.