Since the June 24th Brexit, GBPUSD has been trading in a relatively tight range. And although the pair managed to rally 680 pips from the multi-year low at 1.2790, buyers failed to breach the key 1.3500 handle in July which was a considerable 1,500 pips off of pre-Brexit levels.
Now that things have settled a bit following the recent decision by the Bank of England to cut rates, I’m back to watching for selling opportunities.
One such opportunity that could garner a lot of attention is developing as I type this. Yesterday’s close below 1.3050 followed by today’s retest of the level as new resistance is a great test for sellers.
It’s also exactly what was intended by my statement over the weekend about keeping a close eye on how the pair responds to 1.3050.
However, it’s important to note that this setup has not yet fully materialized. It’s still developing and is therefore just an idea at the moment.
Before I can consider today’s move tradable, I need to see a daily close below the 1.3050 handle. So until the clock strikes 5 pm EST, there is nothing for me to do but wait and see how well sellers hold their ground.
A move lower from here would encounter support at the July low of 1.2790. Alternatively, a close back above 1.3050 would target the July highs near 1.3500.
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