The GBPUSD has a lot of traders confused.
After breaking below the confluence of support near 1.2980, things looked relatively bearish for the pound.
GBPUSD even lost over 100 pips during that February 6th breakdown.
However, Thursday’s price action puts the pair back above that 1.2980 level I wrote about on February 5th.
I won’t even comment on the fact that GBPUSD faked buyers out on January 31st by gapping lower the following Monday.
Although, that scenario wasn’t a total surprise given that I said the February 3rd open would be telling.
So, did the pound fake out buyers and sellers in two weeks?
Not so fast.
First of all, the GBPUSD is still holding below former ascending channel support that extends from the 2019 low.
And second, the pair is below the November 2019 trend line, as shown in the chart below.
So while buyers have taken out that 1.2980 horizontal level, it doesn’t necessarily mean GBPUSD is all of a sudden bullish.
I also think it’s premature to decide one way or the other before today’s close.
The only thing more telling than a daily close is a weekly close (not counting the monthly, of course).
With that in mind, if we see the GBPUSD close the week back below 1.2980/90, it would signal the likelihood of further losses next week.
On the flip side, a weekly close above 1.2980 could suggest continued strength.
Just remember that it’s also going to depend on the bottom of this ascending channel and the November 2019 trend line.
As long as GBPUSD is below those levels on a daily closing basis, buyers are going to struggle.
And last but not least, if you’re unsure about a market or the price action isn’t appealing to you, it’s best to do nothing.
Nothing says you have to trade GBPUSD or any market for that matter.