A few short hours ago, GBPUSD carved a new twenty-month low.
And as I write this, the pound is trading below the 1.2700 range support we’ve been discussing for several weeks.
If sellers can secure a daily close below it, we could see GBPUSD trend lower.
Remember, I use New York close (5 pm EST) charts. Anything else when trading price action can get you in trouble.
Go here to get instant access to the same charts I use to trade price action.
However, I want to caution traders here.
This 1.2700 level is not one you want to try and trade on the intraday charts.
It has held as support since August. A level that significant requires a daily close below it before we can call it broken in my opinion.
As long as GBPUSD is above it on a daily closing basis, 1.2700 will continue to serve as support.
In fact, I wouldn’t be surprised to see the pair close the day back above 1.2700. I don’t think it’s likely, but it would not surprise me given today’s volatility.
Either way, I won’t be trading GBPUSD.
Why?
As has been the case for quite some time, the continuous flow of Brexit talk has triggered an influx in volatility.
Couple that with the thin holiday trade, and you have a recipe for wider spreads and volatile moves in both directions.
That isn’t something I want to take on.
I do think this market could go either way though. And if buyers manage to close GBPUSD back above 1.2700 before the 5 pm EST close, it would attract more bids.
Alternatively, a daily close below 1.2700 would keep the pressure on lower levels including 1.2560 and 1.2410.
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