100 day MA getting in the way.
The GBPUSD moved lower with the dollar Boeing yesterday and int he process extended below a swing area between 1.3999 and 1.40167 (see red numbered circles). The pair also move below and upward sloping trendline within that area and down to test (and crack) the rising 100 day moving average (blue line) at 1.39334. The low price reached 1.39193.
However, the price has now moved back above the 100 day moving average. Looking back at to April, there was a similar break below the 100 day moving average which could not find momentum.
So there is some concerned about the commitment to the short side technically. Ultimately, there needs to be a break – and move away from that moving average – to tilt the bias more to the downside for the pair.
For now, there is a battle between the 100 day moving average and the swing area/broken trendline above on the daily chart.
Drilling to the 5 minute chart below, like other pairs, the consolidation in the Asian session and into the London morning session saw the 100 bar moving average (blue line) catch up with the price declines. The price moved above that moving average line but could not take the next step of getting above the 200 bar moving average (green line). When sellers pushed price back below the 100 bar moving average and started to use the line as resistance, the last leg to the downside was started with the pair testing the 100 day moving average, then breaking below in the last hour or so of trading.
The most recent move higher still remains below the 100 bar moving average at 1.39642 (and moving lower). It will take a move above that moving average line and then the 200 bar MA (green line at 1.3977 currently) to give the dip buyers some comfort. Failure to do that and/or a run back below the 100 day moving average at 1.39332, would ruin the dip buyers hopes and keep the sellers in firm control.