On Sunday, I stated that a close above 1.2530 for GBPUSD would signal strength.
The 1.2530 area was responsible for rejecting buyers in late June and again on July 2nd.
It was also support before that during the first half of June.
Notice how Tuesday’s session cleared 1.2530 with a 1.2540 close.
It should come as no surprise then to see GBPUSD catching a bid so far on Wednesday after retesting 1.2530 as new support.
So where to from here?
As long as 1.2530 holds as support on a daily closing basis, I favor a move into 1.2680 and perhaps 1.2780.
The latter is the recent swing high in June.
Alternatively, a daily close below 1.2530 would signal weakness.
It would also open the door to 1.2450 and perhaps 1.2340.
However, keep in mind that there is a multi-month trend line that extends from the 2019 high.
That level comes in just below 1.2700.
That, combined with the horizontal level near 1.2800 makes GBPUSD a little more challenging to trade.
Of course, if buyers can keep prices above 1.2530 on a daily closing basis, the short-term trend does point to further gains.
And if we see the 1.2700 area fall over the coming days, 1.2800 and even 1.2980 could be targets this month.