Corrective/consolidative trading continues
The GBPUSD is continuing the corrective/consolidative trading that saw the price move away from topside trend line in last weeks trading (see chart below). The pair had a choppy Friday session, but found resistance against the 100 hour moving average (blue line in the chart below). The action today has again been more choppy with a corrective bias.
The low today has found support near the 1.5367 level. This was a floor and ceiling area in the February (see green number circles). The 1.53514 was a swing high going back to February 6. Since that time, most of the activity has been above this area (see red areas in the chart above). The yellow area is a congestive support area for the buyers to lean against in trading today. Stay above will keep the dip buyers against this support happy. A move below and the buyers will likely look for continued selling momentum (with 1.52697 a target)..
Also, of note in the hourly chart is the potential for a head and shoulder formation. The neckline comes in around the 1.5351 area. . This increases that levels importance going forward.
On the topside, the 200 and 100 hour moving average (green and blue lines in the chart above) will be targeted. If the price is to base against the support, ultimately, a move back above the 200 and then 100 hour moving average will be eyed by traders this week. The 200 hour moving average currently comes in at 1.5436. The 100 hour moving average is at 1.5454.
