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The GBPUSD retraced Wednesday’s decline yesterday and in doing so move back up toward the 100/200 hour moving averages (blue and green lines in the chart above).
Recall on both Tuesday and Wednesday, the price tested the 200 hour moving average before falling below that level on Wednesday and racing to the downside. The subsequent price decline will made it to and through the 38.2% retracement of the move up from the May 13 low at 1.24705, but could not sustain the momentum. Yesterday, the price bottom near the 38.2% level and moved back higher. The high price stalled right near the higher 100 hour moving average (blue line in the chart above). Technical levels were est. between the 38.2% retracement and the hourly moving averages.
In trading in the Asian session and early European session today, the price waffled up and down (it was a holiday in London once again), but did a good job respecting the moving averages as resistance on the topside.
The price drifted lower into the jobs report and fell to a low of 1.25197 soon after the release. There was a swing low yesterday at 1.2524. That was also a swing high going back to May 19 and other swing levels between May 24 and May 25. That level is a key level for bias in the short-term.
If the price is to move lower in the GBPUSD , getting back below the 1.2524 level (and the low for the day at 1.25197), would open the door for more selling with 1.2500 and the 38.2% retracement 1.24705 as downside targets
The price has since rebounded and currently trades at 1.25476. That takes the price more toward the middle of the range between the moving averages above, and the support level at 1.2524.
Holding the 100 and 200 hour moving averages after trading above them into the early part of the weekend then using them as resistance really from Wednesday, tilts the bias marginally to the downside in the short-term. Conversely, the sellers had the shot to break below the 38.2% retracement level was on Wednesday and yesterday, but could not muster the momentum to the downside.
So anything can happen, but the good news is the levels are defined and the traders are respecting them (I know there was a move below the lower target, but he came with the volatility after the jobs report). Use that knowledge to control and limit risk and define the bias going forward.