GPBUSD flushes out lower but is trying to snapback higher. What would worry sellers/buyers | Forexlive

Looking at the hourly chart of the GBPUSD, from May 23 to June 25, the price action was “mostly” between 1.34137 up to 1.3633. The price did try to break below the lower extreme on June 19 and again on June 23, but could not sustain momentum on those declines and bounced higher.

Before breaking higher on June 25 and outside the high of the consolidation area, there was a brief failed break. However, the momentum did show up on the June 25th and that ultimately propelled the pair to the high for the year at 1.3787 just yesterday.

Today, the pair flushed to the downside with politics taking center stage, and that leading to heavy bond selling. The 10-year gilt moved up from 4.44% yesterday to 4.60% today (with a high at 4.68%) on the lack of confidence in the PM Starmer government..

The liquidation sent the GBPUSD lower with a technical break back into the consolidation area, and the move below the 100 and 200 hour MAs (blue and green lines on the chart above).

The low price extended through the 50% midpoint of the move up from the June 23 low to the high price reached yesterday. However that break was short-lived, and the price has since rebounded back higher.

The question now for both buyers and sellers is can the price extend back above the consolidation area (above 1.36335) and stay above that level. If it can and extend back above the 200 hour moving average at 1.36438, the selloff looks more politically motivated, and could lead to further upside momentum toward 1.3673 to 1.3683, followed by the 100-hour moving average at 1.37211.

Alternatively, if the area does hold resistance, we are back in the up-and-down trading range with the technical bias favoring the downside over the upside.