GBPUSD trades to new NY/London session lows and goes in the red

Trades below the Friday close

The GBPUSD closed at 1.3345 on Friday. The London session low was at 1.33459. The price just fell below that low and made new NY and London session lows at 1.30406. In the process, the pair moved from positive on the day to negative.

The pair peaked in the  a London session high at 1.33978 – just short of the natural 1.3400 level. Near the highs was also the 50% of the move down from the May 10th high at 1.3410 and the 100 bar MA on the 4-hour chart at 1.3408 (currently at 1.34068 – blue step line in the chart below).  The price did move above a topside trend line, but failed over the last two hours.  

What next?

The buyers are frustrated and continue to give up on the rally today. The Asian low (in the first hour of trading) comes in at 1.33358. That level and then the 200 hour MA (green line) at 1.33208 is also a key level  Looking back to Thursday of last week, that MA stalled the rally. On Friday, the level tried to hold the upside post the NFP numbers but ultimately cracked the level (more bullish).  

I would expect that if tested, the 200 hour MA area would attract buyers with potential for stops on a break below.  It was a tough level to get above. I think that will make it a tough level to get below on the first test at least.