Will GBPUSD sweep the lows or highs first, and what could that mean for a trade setup?
Watch today’s video to see the latest on GBPUSD and find out which DXY level I’m keeping an eye on this week.
GBPUSD has been moving sideways since March 5th, but the price action suggests a sweep could be coming.
The pound hasn’t quite tested the 1.2830 support or the 1.3050 resistance, leaving liquidity building on both sides of the current range.
And as we know, markets seek liquidity.
If GBPUSD sweeps the 1.2870 lows first, I’ll watch for a retest of 1.2830 support for a potential bounce toward 1.3050.
My base case is for GBPUSD to sweep both sides of the range, but the question is which side gets targeted first.
This idea lines up with the DXY trading below 105.00, which is the trend line from October 2023.
As long as the US dollar remains below that level on the higher time frames, I like the idea of looking for GBPUSD buys on pullbacks.
Another factor to consider is the January ascending trend line near 1.2800.
GBPUSD hasn’t tested this level since the first half of February, so a test of the confluence of support at 1.2800 could be appealing.
However, a sustained break below 1.2800 would start to look more bearish for GBPUSD, especially if the DXY manages to reclaim 105.00.
