Forex technical analysis: GBPUSD in midst of narrow two day range

Trades in the middle of the range

The GBPUSD traded at the session low in the first hour of trading at 1.3224. That was just above Tuesday's low at 1.32216. Let's call that a double bottom. BTW, the 50% retracement of the move up from the August low comes in at 1.32168. That area between 1.32168 and 1.32216 is support.

The rally into the London and NY session highs today stalled at the 1.3287-908 area. That was just above the high from yesterday at 1.32873 and the high from Monday afternoon at 1.32878.

Safe to say, there is a ceiling that has developed at 1.3287-91.

Strong floor below at 1.32168-1.3224
Strong ceiling above at 1.3287 -1.32908

The range between the low and the high over the 2 day period is only 71 pips.

That is not a a big range. As a guide the 22 day average trading range is 127 pips. That is for one day.

The "market" is figuring out what it wants to do next and it stalled the fall at what typically is a dividing line for bulls and bears...the 50% retracement (see chart below)

So we sit and wait for the push either above the ceiling or below the floor.

If we continue the selling that has been more dominant over the last few weeks and fall below the 50%, the next targets come in at the 200 bar MA on the 4-hour chart at 1.3181. The lower trend line cuts across at 1.3170 and moving lower.

If the ceiling is broken the 100 hour MA (blue line in the chart above) is at 1.33207 (and moving lower). The "market" has stalled against that MA line (see blue circles). That is a key level that if going higher, the line needs to be broken and stay broken.

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