Technical Analysis GBPUSD: What happened? Now what? via ForexLive

The vote was a resounding “No” the price went up but the GBPUSD is now down on the day. What happened and what now?

The GBPUSD has rotated back down in trading post the results of the Scotland vote (and is trading at new lows as I type)  The cliches “Buy the rumor. Sell the fact” and “It was priced in” will be bantered about today in the press on the business channels on blogs in commentaries.  For me it was the price action and the risk levels which has contributed to the decline.

The GBPUSD ran above topside channel trend line at 1.6421, the old March 2014 low price at 1.6461 level(2), 38.2% of the move down from the 2014 high at 1.6486 (remember this level at 3) but fell short of the next targets against the 1.6535-50 area (see prior post at by CLICKING HERE) . The pair has since moved below each of these levels and currently is trading at the lows for the days.

GBPUSD back into the channel.

The 5 minute chart shows the action in greater detail.

All was going well for the bulls as the results of the voter were awaited and then started to come out.  Just prior to the first results, the price came up to the 1.6461 level (to 1.6457) and held. After the first “NO” was announced, the first break above the 1.6461 level occurred and the high was made. All is good with the buyers. The bulls were in firmer control.

The subsequent correction action (remember the big districts were yet to report)  found buyers against the 1.6461 and near the 50% of the last leg higher (yellow area in the chart).

Soon after a string of “No's” came out from bigger districts, and the double top was made. The failure to take out the prior high was warning number 1 that the buyers were having issues.

The subsequent move lower (to the 200 bar MA) and bounce that failed to get back above  the 1.6486 level again, helped to shift the mood from buyers to sellers.

The rest of the decline was helped after the breaking of the 200 bar MA on the 5 minute chart (green line in the chart below).

Hindsight is 20-20 – I know, but foresight from the technical levels that are deemed  important (I outlined these level in a video HERE) gave traders clue as the story played out

When the uncertainty is high, know your levels and watch how the price reacts on the 5 minute chart.

SO NOW WHAT?

The price just fell to trend line support on the hourly chart. and is finding support buyers at 1.63198. The 100 hour MA (blue line) is at 1.6299. This is the risk.  The price should find buyers against these areas. I do not expect sellers through here.

The  old gap low (from when the “Yes” vote started to peak, is at 1.62788. The price should not go below here too.  The 50% of the move higher comes in at 1.62867. This is another support level that should provide decent support.  So it is a place to buy.

The GBPUSD has come down to trendline support now. The 100 hour MA is not far away at

posted via ForexLive