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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.
The next leg up for GBPUSD is underway.
I first wrote about this bullish breakout on September 4.
Buyers had just cleared channel resistance at 1.2200, which had us watching for a retest of 1.2200/20 as new support.
We got that retest within hours when the September 5 session carved a low of 1.2209.
Then last week ended with a consolidation day that looked relatively bullish.
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Here’s what I wrote before the weekend:
Although GBPUSD bulls didn’t quite reach the next resistance level at 1.2380, they are well on their way.
I’m not seeing any signs of weakness despite the latest three-day 400-pip rally.
Friday’s session is set to close red, but so far, it’s just consolidation.
You can see how Friday’s candle fits neatly within Thursday’s range.
Today’s consolidation is also occurring within the upper half of Thursday’s candle, which is a positive sign for buyers.Quote from Friday’s analysis.
So far, we have a 4-hour close above 1.2380. You can see how this area was previously serving as resistance.
That’s a good start for bulls.
However, I would feel much better about the likelihood of a bullish continuation next week with a daily and weekly close above 1.2380.
Waiting for that to happen is also a non-issue, in my opinion.
You wouldn’t want to buy right now anyway with GBPUSD up over 100 pips on the day.
It’s also Friday which means you would need to hold a new position over the weekend.
That’s never ideal.
So, sitting out a while longer won’t make any difference.
And if you did buy following the breakout I wrote about on the 4th, you’re up 200 pips at the moment.
I also see no reason to exit that position, at least not yet.
That said, if buyers fail to keep price above 1.2380 into this week’s 5 pm EST close, we could see this GBPUSD rally start to unravel next week.
A close above it, on the other hand, would keep the pressure on that 1.2570 region going into next week.