GBPUSD is trying to break out today. But can bulls clear resistance and hold it as new support?
Get all of the details in today’s GBPUSD video below. Remember to scroll down for more information, including an annotated chart.
GBPUSD is trading above the channel resistance I mentioned last week. It’s the top of what could be a bull flag pattern following the April rally.
However, I’m staying cautious for a few reasons.
First, there are several hours until the daily close. As discussed last week, GBPUSD must secure a daily close above channel resistance to confirm the break.
Second, the pair has lost some momentum today. GBPUSD is trading just above channel resistance at 1.3330, making any breakout too close to call.
The third and most significant factor is the DXY trading above 100.20. Last week, I discussed how the DXY needs to lose 100.20 for GBPUSD to become a buy.
That doesn’t mean we won’t see GBPUSD break higher. The above factors could change as we head into Tuesday’s session.
But, for now, making a convincing call on GBPUSD is challenging.
If GBPUSD holds above 1.3330 later this week and the DXY breaks below 100.20, the pound will look much more bullish.
Key resistance and targets in that scenario are 1.3440, 1.3630, and 1.3750. On the other hand, a failure to hold above 1.3330 would signal a failed break and re-expose 1.3200.
