Up. Up. Up.

The GBPUSD was pushed higher on the back of the strong beat in the retail sales (click here for must reading).

The price action has take the pair up to the 50% of the post-Brexit range. That encompasses 1.3522 high and a 1.2789 low. The midpoint comes in at 1.31607. The high today reached 1.3171 (currently trading at 1.3146). Bulls need to get that price above that next target. We cannot talk about higher levels until the midpoint is broken. A move above will eye the 1.3248 (61.8% of the move down)

Where is risk?

Below is a 1 minute chart of the pair. Why look so closely? I want to see how trading occurred right after the release.

The BIG up bar (see chart below) is when the retail sales were released. Note how the price in that first minute shot up above the 100 bar MA on the 4-hour chart and stalled for 3 minutes near the 200 bar MA on the 4-hour chart (blue and green overlay line). That was a key area (green line at 1.31159 currently). Holding that line, provided a spring board for the upside today. It also makes the MA line a key technical level going forward. By the way it is also the 50% of the trend move higher (at 1.31144). Bulls/buyers today will not want to see that level breached.

Any closer support levels?

Well the 1.3141 has a number of lows as well. It does not have much significance from any other reason except, the market has developed a number of lows at that corrective low. The 38.2% of the move up comes in at 1.31278. That is also a support/risk level.

Also note the selling against the 1.31617 level over the last 3 hours. There has been only 1 bar that traded above that level over the last 3 hours. HMMM. So there is a battle going on. In fact, as I get ready to hit return to post, the price just breached the 1.13141 level, but seeing a quick rebound too.


Watch 1.3127 below and 1.31617 above. If there is a move lower, the 1.3114 area is a "line in the sand" to not go below IF the buying today means anything.

The GBPUSD traders took the price down in the first half of August on expectations that the post-Brexit data was going to shock. The spending indication is not so shocking. That should support the pair, but we also know that summer time markets can do anything. There is upside resistance so traders are leaning. The rub of the road will occur on the correction. Do the buyers on the surprise show up, or do they retreat? If they hold the line. 1.31617 is the upside bogey to get above and stay above.