GBPUSD: Weekly Sell Signal on Tap for Next Week?

by Justin Bennett  · 

November 9, 2018

by Justin Bennett  · 

November 9, 2018

by Justin Bennett  · 

November 9, 2018


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Important: I use New York close charts so that each day closes at 5 pm EST.

Click here to get access to the same charts I use.

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On Sunday, I mentioned how the 1.3070 area might be a significant one for GBPUSD. Given the pair was trading below it at the time, it meant 1.3070 was resistance at the start of the week.

But buyers didn’t hesitate during Tuesday’s rally. The pound went on to close the session above 1.3070. Wednesday’s session then caught a bid from the area which helped confirm the area’s significance.

That ended rather abruptly yesterday. GBPUSD bulls surrendered 1.3070 as new support following the 1.3060 close. Remember, I use New York close charts which you can get by going here.

Today’s session has come under some pressure, but not enough to test the resilience of sellers. Update: That’s changed since I started writing this post with GBPUSD now under quite a bit of pressure.

So we’re left asking, how significant is 1.3070?

Said differently, does yesterday’s close below it suggest a move lower next week?

We don’t have enough evidence to make that call just yet. However, I will say that I believe the 1.3070 level is a significant one for the pound. It’s broken down a few times in the past, but the area has served as a pivot of sorts going back to the June low.

Some weakness here next week would agree with what we’ve seen so far from the EURUSD as well. Granted the pound has been the stronger of the two since late August, but the idea of a stronger U.S. dollar is present nonetheless.

The counterargument to a weaker GBPUSD is the aggressive bounce from 1.2700. But let’s not get ahead of ourselves.

Yes, the pound has been on a tear since October 31st, but the weekly time frame tells a different story.

GBPUSD weekly downtrend and consolidation

Despite buyers’ best efforts, they’ve been unable to reverse the downtrend that began with the massive bearish engulfing week in April.

I see the last three months as nothing more than consolidation. In fact, the price action since mid-August looks eerily similar to the range that developed between late June and September of 2016.

That’s just an observation. I’m not suggesting GBPUSD is about to give up 1,000 pips in a single week.

To be confident that yesterday’s close below 1.3070 was significant, we’ll need to see sellers defend it as new resistance. That hasn’t happened yet, so for now, it’s a waiting game which is just as well given that it’s Friday.

Another thing to keep an eye on is how this week finishes up. Right now, sellers are on the brink of carving a 200-pip bearish pin bar on the weekly chart.

If sellers can secure a close below 1.3000 today, we may have a bearish signal going into next week. As always, I’ll be sure to provide an update on Sunday before the market opens, so be sure to sign up for alerts.

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GBPUSD daily time frame


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36  Comments

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    1. @Pierre The timing of when price will get there is not important,what’s important is managing risk and being patient till price reaches your target .

      1. Sir, I’m looking at GBPCAD at the moment and it seems like a H&S has formed on the daily timeframe. It seems that it retested the neckline resistance several times now. Can you see that as well sir or is it only me?

  1. I will be wating for your comments for next week , plus If ypu can please do some comments on gbpjpy and eurjpy. I thank you alot. alex andalibfard

  2. Justin, can you make the charts bigger so they show more clearly the prices on the Y scale, or perhaps add a magnifying tool?

    1. The issue with that is that it slows page load times. That becomes an issue for those on slower mobile networks.

      The key levels should be easiest enough to find by comparing your chart to mine. Apart from the ones I label, of course. 🙂

  3. i am waiting to see the reaction at 1.2925/35 area. I also had a trend line drawn there (i don’t know where i got it from lol), i break below it would likely expose 1.2700 area

    1. Yes. I guess you are Justin’s premium member? Justin is a blessing to our world. But I think I need to believe in my strategy more. I should always use 4hrs candle for retrace. I also still over trade. My God help me. Maybe I should go and pray to God…

      1. If you’re using the 4-hour chart, that may be your problem right there. Try sticking to the daily time frame. Once you get good enough you can move to the intraday charts, but not before.

        Crawl, walk, run.

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