The GBPUSD is at risk of breaking below a significant support level.
I’ve been commenting on the trend line from the year-to-date low since it became a factor in late February.
It has single-handedly supported the 2019 rally effort.
However, the price action in March is a worrying sign if you’re a bull.
I often talk about how markets tend to “hug” trend lines before breaking out.
In other words, the market tests the level repeatedly.
That’s precisely what has happened here. Notice how GBPUSD buyers have failed to push the price higher from this trend line support in a meaningful and lasting way.
The parade of retests since March 11th hints at an imminent breakdown in my opinion.
As it stands now, GBPUSD sellers need to secure a daily close below 1.3115 to expose downside targets.
The “daily close” refers to the New York 5 pm EST close.
Be sure to download the same platform I use so that you know each daily candle closes at the correct time.
Until then, the pair is susceptible to bounces from this support level.
Given how much sideways movement we’ve seen from GBPUSD since last year, those downside targets could be any number of levels.
But I do think the 1.2920 area is one to keep an eye on.
That said, if GBPUSD does break the trend line below, we could see the pair return to the 1.2700 handle or even 1.2480.