GBPUSD: A Happy Holiday for Bulls?

by Justin Bennett  · 

December 24, 2020

by Justin Bennett  · 

December 24, 2020

by Justin Bennett  · 

December 24, 2020

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I’ve liked GBPUSD higher since November 20th.

However, as many of you know, buyers still have work to do.

Last weekend, I pointed out that GBPUSD bulls needed to secure a weekly close above 1.3480 to confirm the breakout.

That’s something I’ve told Daily Price Action members for weeks.

Why is a weekly close required?

It’s because GBPUSD has been trading below the 1.3480 level since June 2018.

You can’t use an intraday or even daily close above an 18-year level to confirm a breakout.

And if you do, you’re likely to get caught up in a false break.

Look no further than the price action since December 16th.

But before we get to the GBPUSD weekly chart, I want to reiterate what’s happening on the monthly time frame.

GBPUSD falling wedge on the monthly chart
GBPUSD monthly time frame

I first mentioned the structure above on November 20th.

The multi-year falling wedge pattern above suggests a higher GBPUSD in 2021.

That said, GBPUSD needs to close this month above 1.3340 or thereabouts to confirm the breakout.

I mentioned that in last weekend’s forex forecast.

As of today, a December close above 1.3340 looks promising.

Turning to the weekly chart below, GBPUSD needs to close Friday above 1.3480 to confirm this bottoming pattern.

If buyers can get the job done, the next hurdle lies at 1.3680.

But ultimately, a weekly close above 1.3480 would place a target on the 2018 double top at 1.4350, in my opinion.

Keep in mind that Brexit talks are ongoing, so be prepared for bouts of volatility.

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GBPUSD weekly bottoming pattern
GBPUSD weekly time frame

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  1. Justin, how do you decide that you have to use a weekly close not a daily close to confirm a breakout, or a daily close not a 4hr close?

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