Last Thursday I wrote a post about the end of the GBPUSD relief rally.
At the time, the pound was still trading above key trend line support.
However, the way sellers pressured the level throughout March was an early indication that it may not hold much longer.
That and the fact that buyers were going nowhere fast.
Sure enough, the March 28th session closed well below our trend line.
The GBPUSD then retested former trend line support as new resistance during last Friday’s session.
And for those who missed Friday’s retest, the pair tagged our trend line for a second time just yesterday.
As you can see, there have been plenty of opportunities to short GBPUSD from the 1.3130/40 resistance area.
So where to from here?
Well, as I mentioned last week, the 1.2920 area is one to watch.
But there are bound to be other support areas that will attract a few bids on the way down.
One of those is 1.3010.
You can see how this level has helped prop up GBPUSD since February 20th.
The 1.3010 area is also the 38.2% Fibonacci of the year-to-date range.
As such, it’s going to be essential to see sellers close GBPUSD below 1.3010 on a daily closing basis.
Until then, we will continue to see bids crop up in the region.
The challenge with shorting GBPUSD (apart from Brexit) is the fact that the market has been moving sideways for nearly a year.
That wouldn’t be a problem if it weren’t for the plethora of horizontal levels created by that sideways movement.
For those who got in near the new resistance area at 1.3130/40, you’re in good shape at the moment.
However, finding new opportunities on the way down may be challenging.
But as for the immediate path forward, GBPUSD bears need to clear 1.3010 on a daily closing basis to expose 1.2920 and perhaps 1.2800.
I will remain bearish GBPUSD as long as the pair remains below the 1.3200 area.
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IMPORTANT: I use New York close charts so that each day closes at 5 pm EST.
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