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The GBPUSD is struggling to find its way.
We no longer have the bullish momentum that was present in late 2019, and sellers haven’t been able to sink their teeth in, at least not yet.
But the indecision isn’t surprising.
The GBPUSD has produced some stellar opportunities over the last few months.
We had the break above descending channel resistance on September 4, 2019. That led to the 800-pip October 2019 rally.
Then came the breakout from the consolidation between 1.2770 and 1.2980 on December 3, 2019.
We were fortunate enough to catch that one in its entirety.
So some choppiness and indecision from the pound is warranted after moves like those.
If you’ve been at this game for a while, you know that there is a time for trading, and there is a time for doing nothing.
Doing more of the latter is what will get you ahead in this business.
Growing an account means doing less of the thing that makes you money.
It’s completely counter-intuitive.
That’s part of the reason why over 90% of those who attempt trading fail to make money consistently.
In fact, I think it’s a primary reason so many retail traders fail.
Doing nothing is harder than trading, yet it’s the doing nothing part that separates those who grow accounts from those who don’t.
Okay, so how does all of this relate to the GBPUSD?
As I mentioned at the top of this post, the British pound isn’t doing much these days.
And I don’t expect that to change anytime soon.
In my opinion, we aren’t likely to see another opportunity develop until we get a rotation into the ascending channel support below.
That could involve sideways price action above 1.2980.
Or, it could mean a deeper correction to 1.2900 or thereabouts.
Either way, the pair needs more time to “reset” itself following the massive 1,500 pip run-up that began last September.
Will GBPUSD be a buy once it reaches ascending channel support?
To be determined.
It will largely depend on how this pullback unfolds.
An aggressive pullback would hint at further weakness, while a more gradual decline could keep things constructive for the pair.
Regardless, the GBPUSD needs more time before it’s worth trading again.