GBPUSD Future Direction Hinges on 1.2240

by Justin Bennett  · 

February 2, 2023

by Justin Bennett  · 

February 2, 2023

by Justin Bennett  · 

February 2, 2023

GBPUSD tested the September 26th trend line today, a significant moment for the short-term uptrend.

I’ve discussed this trend line several times in recent posts, including the most recent weekly forecast video.

GBPUSD September trend line support
GBPUSD daily time frame

There was some confusion as to why I drew the level from the September 26th daily close and not the wick, so allow me to explain.

It comes down to the extreme volatility on September 26th.

Drawing from a higher time frame close helps to normalize a level like this, which makes it more reliable.

Furthermore, it creates a less steep trend line, which is usually more significant.

Today’s bounce from the 1.2240 key level proves it’s a trend line worth watching.

Although we saw GBPUSD bounce slightly this morning, that strength is starting to fade as we enter the afternoon session here in the U.S.

If GBPUSD closes below 1.2300, that could be a sign of weakness.

That’s especially true if the pound also closes below the September 26th trend line at 1.2240.

The uptrend is intact for now, but this is a critical moment for GBPUSD and other major currency pairs following Wednesday’s FOMC volatility.

A GBPUSD close below 1.2240 would expose 1.2110 and potentially 1.1900, while a close above 1.2300 would keep the current range intact.

GBPUSD key support and resistance
GBPUSD daily time frame

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