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GBPUSD: Keep an Eye on This Trend Line

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The GBPUSD is heading toward a critical support level.

I’ve mentioned the May trend line a few times in recent weeks.

It’s the one level that has kept this uptrend intact.

That means it’s the one level that, if broken, could send the GBPUSD lower.

And based on the last few weeks of price action, a break lower isn’t far fetched.

The breakdown in early September appears to have inflicted structural damage to the pound’s upward trajectory.

If that was an impulsive move, it means the latest bounce that began in late September is the correction.

That could lead to further losses.

However, one thing to keep in mind is what’s happening on the monthly chart.

GBPUSD monthly falling wedge pattern
GBPUSD monthly time frame

I’ve talked about this twenty-year falling wedge pattern before, but it’s still one to watch, in my opinion.

The pattern above is suggestive of a longer term bullish view.

So, even though we could see GBPUSD move lower in the short term, I do think we’ll see the pound higher in 2021.

That is, if the falling wedge above plays out as anticipated.

In the short term, though, I do think GBPUSD could pull back, especially when we factor in last month’s bearish engulfing candle.

But as I’ve mentioned before, it’s going to take a daily close below the May trend line to expose lower levels.

Key support below the trend line includes 1.2670 and 1.2520.

Disclosure: I hold a GBPUSD short position.

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GBPUSD trend line support
GBPUSD daily time frame

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8 comments
Justin Bennett says

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ali says

thanks for the update sir.

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Justin Bennett says

Just to be clear, I am NOT looking to buy GBPUSD at trend line support. I have a short position here, and will add more below 1.2850.

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Henryk says

I am waiting for this level fibo H4 1.28650
Henryk

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Bio Fadre says

Thanks for the eye, what is you say about GBPJPY in a long term swing perspective. thanks

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Samuel says

Thanks for the up dates.

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Sandi Rosenau says

I am already a menber. Am I not suppose to be getting these emails? I’ve been a member since April, seems longer, maybe 2019. I’ve been away for a while, since my husband passed away this August 26th. I am anxious to getm back with the forum again. Also, my computer went down and have to download my accounts again on my new one. I think you dom a great job for our members. Anbyone on the fence should join. There are som great members who can also help you.

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Khaleeq Ur Rehman says

Sir Thank you so nice for providing such a valuable analysis free of cost

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