GBPUSD may have just cleared wedge resistance from the November high.
We’ve been tracking this level since December 3rd. However, despite the volatility, market participants have been unable to break free on a daily closing basis.
Until yesterday that is.
GBPUSD first cleared trend line resistance at the 1 pm EST close. But as I’ve mentioned a few times recently, the daily time frame is critical here.
As such, we were waiting for the New York close at 5 pm EST.
Buyers managed to get the job done there as well. In fact, you can even see where GBPUSD tested former resistance as new support at 1.2770 a few hours before yesterday’s close.
Now that we have a daily close above the 1.2750/60 region, we could see the pound move back to the 1.2880 resistance area.
Yesterday’s bullish break also suggests the 560-pip range will remain intact a while longer. I’m referring to the area between 1.2700 support and 1.3260 resistance.
There are a couple of things to keep in mind if you plan on trading GBPUSD though.
The first is tomorrow’s non-farm payroll (NFP). It hasn’t been moving markets quite the way it used to, but it’s still an event you shouldn’t ignore.
The second event promises to be much more impactful than NFP.
I’m referring to the December 11th Brexit vote.
While the outcome won’t rock GBPUSD the way the referendum did in June 2016, it will no doubt shake things up for the pound.
And not just on the 11th, but the days leading up to the vote as well.
I’ll let you decide what to do with that information. At the very least, I’d say it calls for a smaller position size.
As for the technicals alone, things look relatively bullish for now. The key will be whether or not bulls can keep GBPUSD above 1.2750/60 over the coming sessions.
If they do, our attention will swing to 1.2880 and perhaps even 1.3070.
And if GBPUSD closes the day back inside this wedge pattern, it’s back to range support at 1.2700.