GBPUSD has dropped by 1% and is currently testing an important swing area and the 200-bar moving average on the 4-hour chart. The 38.2% retracement level, from the May low to the June high, is at 1.3443 and serves as a target for further decline. There is also a swing level between 1.3423 and 1.3441, which has been established since April. The rising 200-bar moving average on the 4-hour chart is in this range, specifically at 1.3429.

Price Movements and Resistance

Earlier in May, the price dipped below this moving average but quickly bounced back. It maintained its position above the average before climbing higher. This recent drop raises questions about current price levels. The resistance to further upward movement lies between 1.3460 and 1.3472. Currently, the GBPUSD shows signs of hesitation after fluctuating within a tight range. The 1% drop has brought us back into a technical zone that has acted as a pivotal point several times in the last few months. Simply put, a swing level is a price range where the market often changes direction. The zone between 1.3423 and 1.3441 has been a key battleground for sentiment shifts since April. When these ranges appear again, traders often recall where momentum stalled or reversed.

Technical Analysis and Trading Strategies

The 200-bar moving average on the 4-hour chart also lands in this region, at 1.3429. Moving averages function like pressure gauges. When the price hovers around one, especially a rising one, it indicates the market is weighing whether to continue short-term trends or revert. The last dip below this level in May was brief, as the price quickly rebounded. This is important to remember as the pair tests the same area again. Fibonacci retracement levels help traders identify potential reversal points after a recent move. From the low in May to the high in June, the 38.2% level is at 1.3443. This level is closely monitored; any drop below it could lead to deeper retracements, possibly hitting the 50% or even 61.8% levels. For now, 1.3443 aligns with both an established swing range and the long-term average, intensifying focus on this area. Resistance remains strong between 1.3460 and 1.3472. This ceiling suggests that even if bids remain firm during minor dips, further gains will require new momentum to break through. Each time the price tries to push past but fails, more sellers emerge, increasing the barrier’s strength. For trading strategies in the upcoming week, the zone between 1.3423 and 1.3443 will be crucial. If it holds, similar to May, it may prompt further upward tests. However, if it breaks decisively, it likely won’t happen randomly. Such a move will probably be accompanied by volume and decisiveness, guiding traders to adjust their directional bias. We are entering a period where activity in this band will not only shape directional decisions but also impact trade structuring—whether to keep positions small amid uncertainty or take on more risk when clearer signals emerge. Create your live VT Markets account and start trading now.

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