I’ve highlighted the importance of GBPUSD 1.3100 and 1.3140 recently, and both levels have now failed.
In today’s video, I break down what Monday’s failure could mean for the pound and the key DXY levels to watch this week.
GBPUSD has failed to hold above 1.3100, a critical level I’ve mentioned recently.
While this may seem like a typical failure, the symmetry since the start of 2024 suggests something more serious for the pound.
It’s common for markets to sweep or run major highs and lows because liquidity builds around these areas.
That’s exactly what we’ve seen with GBPUSD since August.
The pair swept its 2023 high at 1.3140, along with the top of its 2024 ascending channel, before failing to hold above both levels.
While it’s not always the case, failed breakouts like GBPUSD’s move above 1.3100 often result in a more extended move in the opposite direction.
For GBPUSD, that could mean a significant correction toward 1.3000, 1.2900, and potentially lower.
The wildcard here is the US dollar, which remains in a sideways range and has yet to confirm a breakout.
The DXY is still below 102.00 resistance, so there’s not much to get bullish about yet.
Time will tell if the US dollar can reclaim higher levels, but for now, I’m bearish on GBPUSD while below 1.3110 on a daily close.
Key support is 1.3000 and 1.2900.
