After losing 330 pips to start the week, GBPUSD has clawed its way back to breakeven and then some. In addition to making up lost ground, the pair has now broken above confluent resistance at 1.4400 on a 4-hour closing basis.
This level marks the February 19th gap, which was filled last week and quickly acted as resistance at the start of the new week. It also acted as support on several occasions between February 8th and 11th.
But before we get too far along, let’s take a look at the daily chart to get a feel for where the pair might be headed should it close the day at or near current levels.
I mentioned GBPUSD yesterday inside the member’s area as it was retesting the 1.4080 area, noting that the price structure that has been forming since January could easily turn into a reversal pattern. A mere 24 hours later, we find the pair trading 380 pips higher.
Going back to the break of 1.4400, the latest 4-hour close represented a marginal break at best. With this in mind, and considering that the current session’s range is fairly extended at 250 pips, it may be prudent to wait for the day to close before looking for an opportunity to get long.
Should the day close above the 1.4400 area, it will likely act as new support as we move into the final 24 hours of trade. Key resistance comes in at the 1.4670 handle, which marks the intersection of the February 2016 high and trend line resistance that extends off the August 2015 high.