The GBPUSD moved up to test the 50% of the move down from the April 21 high yesterday, and broke above that level at 1.2622 early in the Asian session today. The high price also extended above the May 4 high at 1.26373 on its way to a high price for the day of 1.2666.
However those breaks were all erased with a move back down that saw the GPBUSD pair move below the low of a swing area near 1.2600 on its way to the low for the day at 1.2587 (see yellow area in the chart above).
That low stalled comfortably ahead of the rising 100 hour moving average (blue line in the chart above) currently at 1.25678. The price move back to the upside.
So there was a failed break to the upside above the 50% midpoint and the May 5 high, and also a failed break to the downside below the 1.2600 which was the swing area going back to April 26.
What to do?
Choppy markets that swing around fairly key technical levels (like the 50% retracement and the swing area) can be frustrating.
In the North American session, the price has rebounded back above the 50% level and the May 5 high at 1.26373 and currently trades at 1.2639.
If the bias to the upside is to continue, staying above the 50% midpoint at 1.2622 is a short term and close barometer. I know there was a failure earlier, but given the rebound, the buyers have another shot of building off the break and keep the price on the upper half of the range since April 21.
Conversely, if the buying fails and the price moves back below the 50% retracement level, I would expect the price to ultimately move through 1.2600 and then look toward the rising 100 hour moving average 1.25678 for another key retest of that moving average level.
Earlier this week on Wednesday, the price moved below the 100 hour moving average but could not sustain momentum. The price moved back above that level and use the level as support both on Wednesday and again on Thursday.