GBP/USD Moves Below 100-Day Moving Average But Bounces Again

The GBPUSD has traded above and below the 100 day MA for 11 of 13  days. Normally, when the 100 day MA is broken, the price moves away from the level. The fact the price is hanging around the level is indicative of a non-trending market.  What we know about non-trending markets is they look to trend at some point.  The longer it non-trends, the better chance for a trend type move of significance.  We are looking for such a move.

So how do you trade it?  The best way to trade it is to look for low risk trades at the most important technical level. For the GBPUSD that is the 100 day MA. This average is going sideways (currently at 1.6361).   If the price is below the level, the bias is down. If the price is above the bias is up.

Unfortunately, the non-trend nature can lead to some whipsaw action.  Today the price dipped below  and went 10 pips only to rebound back above by about 30 pips.  The next major breach to the downside, did have additional downside momentum and the price decline extended to a low of 1,6274.

The price is now back above the 100 bar MA on the 5 minute chart which gives the intraday bias a more of a bullish sentiment once again (or at least suggests the bottom is in place). The upside resistance now comes in against the 200 bar MA at the 1.6356 - not a bad level to sell against with a stop above the 100 day MA at the 1.6361 level.  We will see what happens.

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