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GBPUSD is rebounding today following Friday’s break below 1.2110 support.
That area had served as support since the pair tested it on August 1st.
It’s no surprise then to see that today’s high (so far) is 1.2106.
Given that this 1.2100/10 area previously served as support, any retest of it as new resistance is going to attract sellers.
The question is, will it continue to hold or does GBPUSD need to correct higher?
Nobody knows for sure, but the descending channel in the chart below makes me less confident about selling GBPUSD down here.
Channel support near 1.2000 also makes it more difficult to achieve a favorable risk to reward ratio.
For those reasons, I’m not a fan of selling GBPUSD below 1.2110.
I prefer to give the pair some time to see where market participants want to take prices from here.
As I wrote on Sunday, a daily close back above 1.2110 would be bullish. It would also expose channel resistance at or just above 1.2300.
Alternatively, I suspect GBPUSD will continue to find support above 1.2000
And even if the pair breaks below channel support, I won’t sell given that most downside breaks of descending levels become bear traps.
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Thank you, Sir!
can any chance that they touch daily high bullish
PLEASE GIVE YOUR VIEW ON EUR/JPY
Nice one Justin. Pls do u always calculate position sizing on all your trades? And you always wait for price action signal at key location before taking ur trades bcos sometimes they will not form just a bearish or bullish candlestick confirming who has taken over or continuation pattern?
What are the criteria for bear traps? Do you have any relevant lessons or articles?
Thank you for the excellent analysis sir justin.
it seems like the pair is starting to find its footing again, I’m with you and I will wait to see it settle and grab the attention of the bulls…
your very talented