GBPUSD is reacting to the 1.2850 level early this week. In today’s video, I discuss what I’m watching as we head into this week’s volatility.
Updates include analysis of GBPUSD on both the 4-hour and daily time frames, as well as the US Dollar Index (DXY) as it attempts to hold an early-week breakout.
We have a few critical developments occurring early this week, with GBPUSD breaking support intraday and the DXY clearing resistance.
I’ve discussed these key levels in recent posts and videos, and now we have some reactions to watch.
If GBPUSD holds below 1.2850 into today’s close, it will open up the 1.2750 support area.
That’s the 2021 descending trend line I’ve mentioned for months.
On the flip side, a close above 1.2850 will keep the level intact as support and expose 1.2900 resistance.
The same goes for the DXY concerning the key 104.50 level.
If you saw the Weekly Forex Forecast, you know that 104.50 was the level dollar bulls needed to break to open up the 105.00 resistance area.
We’ve seen a 4-hour close above 104.50, so now it’s up to bulls to defend it.
If the DXY can close today above 104.50 and continue to defend it as new support, we could finally see a move toward 105.00 resistance.
Remember, significant event risk starts on Tuesday, including Wednesday’s Fed rate decision and press conference.
