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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
GBPUSD buyers are back at it again this week.
They supported the currency pair on September 5 after the break of channel resistance on the 4th.
Buyers also stepped in early this week to keep the price above those August highs at 1.2280.
I mentioned this area in Sunday’s YouTube video.
For now, we could see the pound consolidate below that 1.2380 region before buyers are ready for the next leg up.
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We’ll see if GBPUSD bulls can keep prices above 1.2280 on a daily closing basis.
So far, so good.
But even if the pair fails to hold 1.2280, I think traders need to respect the potential for gains while GBPUSD is above the 1.2200 handle.
I also wrote about that level on Sunday.
If buyers intend to push prices higher, they are going to need to secure a daily close above that 1.2380 area.
Until that happens, 1.2380 will continue to attract sellers.
However, a break above 1.2380 could very well extend the current rally by another 200 pips up to the 1.2570 region.
Not only is it an incredibly significant level on the weekly time frame, but it’s also the 50% Fibonacci retracement of the channel below.
I will continue to favor buying GBPUSD while 1.2200 is intact as support.
That said, gains will be limited until buyers can break 1.2380, which would expose the channel’s 50% retracement at 1.2570.