EURGBP used the 100-day MA as a ceiling on Wednesday and Thursday.
On the downside, the 200-day MA and the 100-hour MA were broken on Wednesday and attempted to stay below yesterday’s trading. However, after moving back above, resistance turned back into support. Price rose to retest the 100-day MA during yesterday’s New York trading session (and found sellers).
Today’s price reaction was initially to the downside in the European session, but true to the moving average support, buyers leaned against the 100 hourly moving average and pushed the price higher.
This time the ceiling against the 100-day moving average has been breached, but the next target area near the 61.8% retracement of the move down from the July high at 0.84899, and a zone swing between 0.8488 and 0.84946, found willing sellers.
After falling back below the 100-day moving average for the past 4 hours, the downward momentum has increased with the pair returning to…..drum roll….the 100-hour MA.
Technically, the price did what it had to do around the moving averages, the retracement level and the swing zone.
- Sellers sold at the break of the 100 hourly moving average and the 200 day moving average,
- Buyers bought on the way back above the 100 hourly moving average and the 200 day moving average,
- The sellers relied on the 100-day moving average,
- Buyers bought after breaking above the 100-day moving average,
- The sellers relied on a swing zone and the 61.8% retracement.
- Buyers are buying again against the 100 hour MA.
And then ?
- The drop below the 100 hourly moving average is more bearish with the next target at the 200 day moving average at 0.8437
- absent that, and a break above the 100-day moving average at 0.84698 would tilt the bias further to the upside and tempt traders back towards the 61.8% retracement.