I wrote about the GBPUSD on January 10th.
I’ve also included the pair in every Weekly Forex Forecast, including the latest video on January 11th.
The idea behind my recent GBPUSD posts and videos is that the pair needed more time to reset itself.
In other words, the massive run-up last October, as well as the December rally, warranted some consolidation.
And that’s exactly what we’ve seen from the pair.
However, today’s session could make things interesting for next week.
After bouncing from the 1.2980 key level earlier this week, the GBPUSD is carving a potential bearish engulfing candle today.
I say potential as today’s session isn’t over yet.
But with just five hours to go, it’s probably safe to assume that Friday’s session will engulf Thursday’s 50+ pip rally.
What’s even more appealing is the trend line that has established itself since the November 2019 low.
Notice how the trend line in the chart below was a factor in late-December and also earlier this week.
Now, I still think traders need to respect the ascending channel I’ve pointed out several times recently.
That channel bottom isn’t far away from today’s price.
With that said, a daily close below the November 2019 trend line near 1.2980 would likely send the GBPUSD lower.
And we may not need to wait long, either.
Notice the lower highs on the GBPUSD since December 13th.
Is that a sign of an imminent break lower?
As of this writing, I would say so.
We’ll have to wait and see what happens next week, but a daily close below the 1.2980 area could send the pair lower.
That would be especially true if we see the pair take out the ascending channel support I discussed last Saturday.
Key support levels below that include 1.2770 and 1.2570.