The buyers have to take control. So far, they can't.

As Mike pointed out earlier, it is hard to catch a falling knife and the GBPUSD has been tumbling. Ryan points out, the 1.3844 low going back to March 18, 2009 is the next level looking back in time. Below that and the March 2009 low si at 1.3652. The 2009 low price from Jan 23rd, 2009 came in at 1.3501. Could we be going there? It is hard to catch a falling knife. It is also hard to see how far the knife will go.

Of course, the price can also rebound quickly too. The price has a 789 pip trading range this month. This week it has a 518 pip move. Markets get oversold. Sellers have a price too where they may feel enough is enough.

I don't suggest putting a wet finger in the air and seeing if you feel a breeze. That is not the way to catch that falling knife. The best way is to try and grasp onto a victory against the sellers. After all, losing streaks are stopped by winning. Buyers need a victory. How does a victory come? By having something bullish happen technically..

Looking at the hourly chart, the price has broken below a lower trend line connecting recent lows. That line was broken suggesting the knives are indeed falling. There is an acceleration of the selling. If you try and catch the falling knife and you are not leaning against some support level below (we are not near that 2009 low at 1.3844), you are relying on BLIND LUCK if you go and buy when the trend is accelerating. That is not suggested - especially for retail traders. What makes you think you've picked the low this time?.

TRADERS LUCK is when you lean against a technical level and hope that other traders notice. Putting it another way...iIf a bottom is in place, the buyers need to show they can take control - technically. They need to squeak out a technical victory.

Looking at the chart below , the pair is currently testing the underside of that broken line at the 1.3942 (the high is at 1.3939). If the price can take back that level (i.e. get back above), the buyers will have taken back some control. On a break back above the line, traders - looking for that elusive bottom - would then have something to lean against. That is.... what was once support (when the price was testing it at blue circle 3), then became resistance (on the break below that line), will once again become support it the price can get above the line and stay above. It would be a small technical victory and allow the trader to lean against something where risk can be defined and limited.

From there, other targets (victories) for the buyers would be the 38.2 and 50% of the last leg down (from yesterday's highs), and that closest topside trend line that is slashingthrough near the 50% level at 1.4015.

Now there is another side of the coin. That is the sellers ARE in control. So the underside of the trend line is a resistance level too. Traders sold against it on the first test. WHy? The trend is bearish and risk can be defined against it. If you look for more downside, this is a level to lean against for sellers too.

Catching a falling knife is not suggested, but if you can grasp onto a technical level that is plain to see for all traders out there, there is a chance you may be able to catch a corrective move with limited risk.