A close below 1.2165 would be the 9th lower close in 10 days
The GBPUSD has reversed course and is now back lower on the day. The close yesterday was at 1.2165. We were higher earlier in the day, but the EURGBP break to the upside above trend line resistance has helped to send the GBPUSD back to the downside. The tail is helping to wag the GBPUSD dog.
Nevertheless, the GBPUSD has been trending lower. The pair moved away from the 100 day MA last week and with a lower close today (below 1.2165) will have the 9th down day in the last 10 trading days. That is a pretty good run. The price has moved from 1.25689 to the low today at 1.21322 in that run.
The pair has some support at 1.2121 which was lows on Jan 9th and Jan 13th. Other (perhaps better) support can be found at 1.2087. After the flash crash in October, the price bottomed at that level on October 11 and October 25. On the gap lower on Jan 16, the high stalled ahead of that level at 1.20845. SO that would seem to be a key target level.
Looking at the hourly chart, the last run to the downside made new lows for the day and the week. THe earlier low for the day stalled right ahead of the low from yesterday. The move to new lows took out that double bottom but only by 5 pips. HMMMM. CAUTION.
The fake/failed break, may make traders a bit cautious. No one like selling the low after 9 out of 10 days down. If you were to buy the dip, what would you like to see?
Well a move below the double bottom at 1.21377. The lowest hourly bar close was 1.2147. That too might be eyed. What would make dip buyers more happy on a trade, is if the price can get back into the black for the day (above 1.2165). It does not necessarily "call the bottom" - the pair is still a ways away from the 100 hour MA at 1.2212 - but it gives the buyers something to hang a hat on.
