October 25, 2016: Huge range in the pair but can't keep the trend move lower going

The GBPUSD fell sharply in trading today. Then snapped back higher in the late NY morning and NY afternoon.

In the process, at the high the price held very nicely against a topside trend line and 100 hour MA (blue MA line in the chart above). Sellers/bears leaned and the price eventually broke

  • a lower triangle trend line,
  • fell below an old topside channel trend line (follow blue circles) and
  • eventually stalled after the pair tumbled down to the lower channel trend line at 1.2082 area.

The post-crash low was also in the area at 1.20876.

If the high was a "nice" high. I guess I should call the low a "nice" low too. It is my guess that given the quickness of the move lower, it seemed like the buyers at the lows were mostly profit taking sellers from above. They had the incentive to take profit and lean against support without fear in what was a fast market lower.

Once that low held, other traders mustered the courage to buy (or were forced to buy after it went too far. The corrective move was on.

What now?

As we head toward a new trading day - after a day that saw 161 pips down and 124 pips back up - it kinda takes the ball out of the bears hands and the bulls hands. We may be back to trading a range.

Technically, on the topside. the 100 and 200 hour MAs are now converged at 1.2231. The trend line is a little higher. That should be a level where sellers - if they are interested - will look to sell. Risk is defined and limited. Would they be tempted to sell earlier? Perhaps against the underside of what were broken trend lines from earlier in the day (watch 1.2210 area).

Having said that sellers should lean at the resistance above, I would also not be surprised to see buyers near 1.2166 (i.e.. against that trend line with all the blue circles).

There is nothing like a day like today to take ideas of sharply lower or sharply higher out of the equation. Buyers had a chance at the highs/ MA and they failed. Sellers had a chance at the lower trend line/ prior low and they failed. That helps to define the range between those extremes now until the courage is returned to attempt another break. Be patient.