GBPUSD back up testing its 100 hour moving average and swing area from last week’s trading

The GBPUSD is moving higher today after bottoming on Thursday last week at 1.33574. Looking at the daily chart above, that low was within a swing area between 1.3352 and 1.3375. Holding that level stalled the fall and we have seen a rebound off of that low on Friday and again today.

The price action to the upside is still modest and full of choppy up-and-down price action. After rallying in the Asian session to a high of 1.3448, there was a quick dip to the downside in European morning session, which saw the price move to a low of 1.33924. However, over the last two hours the price has retraced higher and toward the highs for the day.

In the process, the pair has moved back above a swing area on the hourly chart between 1.3434 and 1.3439. The falling 100 hour moving average (blue line) is also in play at 1.34391. The current price is trading just above those levels at 1.3442. Buyers are making a play. The question is can they stay above the aforementioned levels and push higher? There is some pause despite the break.

Looking at the hourly chart if the price can move higher, the move down from the January 20 high has the 38.2% retracement at 1.3473. Above that, and the falling 200 hour moving average 1.35021 would be targeted (green line). The last time the price traded above the 200 hour moving average was back on January 20.

Conversely, find sellers here and the price may be off it’s low level from last week, but the correction is still quite week. Buyers would likely turned back to sellers in push down toward the lows from today and last week.

The Bank of England meets this week with expectations leaning toward a 25 basis point rate hike to 0.5% from 0.25%. That should be supportive.

• Having said that, the BOE did increase rates to 0.25% from its historic low of 0.1% in December. Since then, U.K. inflation rose to a 30-year high in December as higher energy costs, resurgent demand and supply chain issues continued to drive up consumer prices.
• Although, the price has been steadily moving to the downside since peaking on January 13, it does remain above the December 16 close at 1.3320 (the day the BOE raised rates in December).