Daily Price Action
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GBPUSD: Awaiting Further Instructions

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After doing a lot of nothing between mid July and late August, GBPUSD has been extremely active over the past six weeks. This increase in activity may give us a favorable setup in the coming days as the pair now sits just below a key resistance level.

Over the weekend I mentioned the indecision we were left with on Friday. It was unclear as to whether the 1.5170 handle would hold and force the pair lower or give way and allow the bulls to take control.

The last 48 hours have given us the answer as the pair is now hovering just 17 pips below key resistance at 1.5330. This area has been influencing price action since 2008 but more recently supported prices in July and September of this year.

From here the plan becomes quite simply. But before we get to that, I want to say that there is no signal to enter the market at the moment. The following is merely an idea and is dependent on the next daily close.

Yesterday’s close below 1.5330 offers an opportunity to watch for bearish price action over the next 24 hours. With a slew of key event risk for the pound scheduled for Thursday at 7am EST and unemployment claims for the US at 8:30am EST, volatility is likely to continue into the current session.

A bearish pin bar closing below the 1.5330 level would make for a compelling short opportunity, while a daily close above the level would have us watching for bullish price action on a retest as new support.

Either way, the idea is to use the key horizontal level to allow the market to show us where it wants to go from here.

Summary: Watch for bearish price action below 1.5330. Key support comes in at 1.5170 and 1.4980. Alternatively, a daily close above 1.5330 would have us watching for bullish price action on a retest of the level as new support. Key resistance from there would come in at 1.5465 and 1.5660.

GBPUSD support and resistance levels on the daily chart

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