GBPUSD reached a twenty-month low on January 3rd.
It didn’t receive much attention though, probably because it only lasted for a few minutes.
The bullish pin bar that formed as a result of the January 3rd flash crash sent GBPUSD higher in a hurry.
To put things in perspective, GBPUSD is now up 600 pips in just 14 trading days.
I pointed out the bounce that occurred on the 15th as a result of the much anticipated Brexit vote.
We also discussed how the 1.2830 area would serve as support this past Sunday.
Sure enough, GBPUSD reached a low of 1.2830 on Monday before rallying another 200 pips.
So far today, the pair has taken out key resistance at 1.2960. I also wrote about this level on Sunday.
But it’s going to take a daily close above 1.2960 to confirm the break.
The daily close refers to the New York 5 pm EST close. These charts are required for trading price action.
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If buyers can get it done, the 1.2960 area will become support.
However, GBPUSD is approaching an area that could be problematic for buyers over the coming sessions.
If we look at the price action in the second half of 2018, we can see a descending channel that extends from the June high.
At the moment, channel resistance comes in near 1.3080. As such, we could see selling pressure develop in this area.
On the flip side, a daily close above 1.3080 would keep the rally intact. It would also expose the 1.3260 horizontal resistance area.
It’s going to come down to the daily close, but so far so good for buyers.