Daily Price Action
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GBPUSD: Buyers Not Ready to Back Down

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At the end of last week I cautioned GBPUSD shorts.

The way the pair bounced on December 12th signaled that the recent downtrend may have reached a short-term bottom.

But what really caught my eye was the way price action was hovering just below the 1.2700 handle.

This area previously served as range support between mid-August and early December.

The breakdown on the 10th of December meant any retest of 1.2700 would likely encounter selling pressure.

In other words, it would act as new resistance.

Sure enough, that’s exactly what we’ve seen since December 18th. The session on the 24th came close to breaking free, but buyers didn’t quite make it.

However, this type of price action does not signal a selling opportunity.

Although 1.2700 continues to serve as resistance as I type this, there is no indication that sellers will be able to force another leg lower.

In fact, I wouldn’t be surprised to see GBPUSD close above 1.2700 sometime soon.

Perhaps we’ll have to wait until the new year, but right now I see no reason to sell the pound.

On the other hand, I see no reason to buy it, at least not yet.

But a daily close above the 1.2700 handle could present an opportunity to get long. It would also expose 1.2880 followed by 1.3070.

The “daily close” refers to the New York 5 pm EST close. If you aren’t using this type of chart, you’re exposing yourself to false breaks.

Go here to get instant access to the same charts I use.

It’s going to take bearish price action such as a pin bar from 1.2700 to convince me that another push lower might be in the cards.

Until then, this looks like a market that’s ready to break higher. As always, time will tell.

Keep an eye on the EURUSD falling wedge I mentioned recently as well.

The euro and pound aren’t as correlated as they used to be, but it’s going to take a weaker USD to trigger a higher EURUSD.

And if the EURUSD gets pushed higher by a weaker USD, the GBPUSD will likely follow suit.

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GBPUSD support and resistance levels

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13 comments
Olu says

Thanks so you, am becoming a better trader everyday.

Reply
    Justin Bennett says

    You’re welcome. Glad to hear that!

    Reply
alex says

Thanks justin… It seems market follow you..

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Margeir Margeirsson says

Consider your comment on this pair, I expect it to take the lower leg, down to 2.616

Reply
OGBORO preciouslife says

Thanks man

Reply
mimi says

hi justin , but i’m not in your direction and I see some big losses again for gbp in each pair you think… , by my calculation gbp will be not be able to achieve higher picks in near futures…

Reply
    Justin Bennett says

    The market will have the final say, as always.

    Reply
Billy says

Hi justin, you are very work hard even in the holiday, thanks man

Reply
    Justin Bennett says

    Always! You’re welcome.

    Reply
Abdus Salam says

Thanks. Euraud study need now

Reply
    Justin Bennett says

    You’re welcome.

    Reply
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