Pair trades in the middle of the post-Brexit extreme area and tests a trend line.
The GBPUSD has just made a session low and in the process moves even further away from the 1.3047-74 area.
Yesterday was an up and down session, but in the NY session, traders started to lean against the 1.3047 area (see 5-minute chart above and post from yesterday outlining the traders leaning).
So what next?
Looking at the 4-hour chart, the price has been testing a trend line that connects recent lows (see chart below). Buyers leaning? It looks like it. Traders short, may be taking some profit. ON a break, however, look for stops with other targets being 1.2928, 1,2904 and 1.2855. Those are low closes on the day for the pair.
Right now....For the day, look for support against the aforementioned trend line. Why not?
What do the dip buyers want to see?
1. If they are leaning against a line, buyers don't want to see a move below that line
2. Looking at the 5 minute chart below, the 100 bar MA on that chart (blue line) held on the last test. The high before that held the 200 bar MA (green line). So traders are paying attention to those levels. Get above and the dip buyers are feeling better/more confident.
