Rising above broken trend line and end of August lows

The GBPUSD tumbled and tumbled on Friday - sending the price below all sorts of levels in the process. The last few levels were the lows from the end of August at 1.3058, and trend line support.

The price has moved back above the trend line and back above the series of lows at the ned of August as well. So there is corrective action in the pair. The 38.2% of the move down from the on Thursday comes in at 1.3102. The 50% is 1.3135. That level is close to the lows from Wednesday. If we going higher this week, those levels will be eyed.

Have we exhausted the selling in this pair or is there more room to go to the downside?

Fundamentally, the BOE spoke last week of a better than expected post-Brexit economy but also spoke to the idea of rates potentially going lower. In the US, it is the Fed's turn to influence with the FOMC decision on Wednesday.

Looking at the daily chart, the pairs move below the 1.3054-58 area was a key level. The rice moved below that level in July and August and stayed below for a number of days. The low on Friday got just below the 1.3000 level to 1.2996. The final selling push happened in the NY afternoon session on a Friday when liquidity is light. If the push below the 1.3054-58 was just an aberration, holding that level today, would be eyed as a clue. It also could be a close risk defining area.