The GBPUSD looks set to take on the post-Brexit low at 1.2790 as new resistance next week. This comes after the pair punched through the level on October 4th just three days before the pound flash crashed to new multi-year lows.
We’ve been discussing the possibility of such a retest for the last few weeks. Back when the pair was hovering above support at 1.2326, the odds of a 1.2790 retest looked pretty bleak.
Fast forward to today and the GBPUSD is just 120 pips south of the key resistance level.
The 1.2790 handle is joined by a trend line that began three days after the June 24th Brexit. After serving as resistance on three separate occasions the pound broke above the level on September 1st.
But as you can see from the chart below the bullish break was short lived.
So will the pound have enough backers to get through the 1.2790 resistance area next week?
We’ll have to wait to find out.
One thing I can say with certainty is that I won’t be doing anything without the right price action signal.
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