Daily Price Action
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GBPUSD Reacts to 1.4070 as New Resistance

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The GBPUSD has some of the best technical levels around at the moment. On Sunday I pointed out two handles that would be key should the pair continue to weaken as it did on Friday.

A pullback was my base case here given last week’s price action. Here’s what I wrote on Sunday:

The fact that buyers were unable to force a second retest of resistance at 1.4335 last week may suggest a pullback is in order.

Friday’s selloff is what tipped me off to the idea that we’d see another round of weakness this week. Monday’s close below 1.4070 exposed the next key support at 1.3850, two levels that I included in Sunday’s forecast.

So where to from here?

At the moment, sellers are defending the 1.4070 handle following some relatively hawkish remarks from BOE’s Mark Carney.

As long as the pair remains below 1.4070 on a daily closing basis (New York 5 pm EST), the downside remains exposed. However, if buyers can close the day back above 1.4070, it would suggest that further upside is in store and re-expose 1.4335.

Per the weekly forecast, key support remains 1.3850. It’s going to take a daily close below it to open the door to the next support level at 1.3610. This is the level I pointed out to members on February 4 as an ideal place to watch for bullish price action.

The 1.3610 area was part of the trade idea I gave to members at the start of the week:

Similar to the EURUSD, I think the pound could see some weakness at the start of the week. While you could watch for bullish price action from 1.4070, I think it makes more sense to look lower toward 1.3850 or even 1.3610.

I’ll remain bullish the GBPUSD as long as 1.3610 holds on a daily closing basis. That said, I do think this uptrend needs to unwind a bit more before we see any signs of renewed strength.

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GBPUSD range on the daily chart

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14 comments
lak says

can be considered as double top. now testing the neck line

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Maddy says

Hii justin,
Your price action is really priceless….even eurjpy, whose support turned resistance, audjpy which has broken the resistance….etc…
Thank you so much for your analysis….

Reply
    Justin Bennett says

    You’re welcome. The yen is where I’ve put 80% of my attention over the last couple of weeks; even more so now.

    Reply
Tijani says

Very much on point. Well done.

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Sam says

Hi Justin (Mr Spot On)

When the price hit that 1.4070 it did not take long for the price to go back below 1.4000. No I am waiting for the daily close to see if price will close below this level.

Thank you for the weekly forecast, you highlighted this level 1.4070 on Sunday.

Reply
    Justin Bennett says

    You’re welcome. I pointed out both 1.4070 and 1.3850.

    Reply
rich says

Hello justin let me ask you if i can,since you’re trading on a daily chart and you enter a trade what keeps you in a trade? Is it as long as price is above your 10 ema and if so do you take those hits when a daily candle doesnt go your way but it’s still above your 10 ema?thank you,rich.

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    Justin Bennett says

    I don’t use the averages like that. I’ll usually take a look at the broader picture to identify trend lines, channels, etc. That guides my longer-term outlook.

    Reply
      O.G.A fx says

      Hello sir
      What and how do you use the EMA on the chart,you always have the both EMA on almost every chart.

      Your analysis is really so perfect Mr Justin and the best part is you give all the analysis out from a heart of love for free,i am still demo trading and will start live trading soon but i wonder how much wealth of knowledge you will have in the paid course,i can only get to find out when i pay for you course in the soonest future.
      Thank you sir

      Reply
      rich says

      Thank you sir!

      Reply
Sumantra kumar halder says

Thank you very much

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Vijai says

Thank you very much, Justin.

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rich says

Hello justin,if you’re looking for a long opportunity does price action have to be above the two ema’s or would you enter if you saw a bullish candle at a support line? thank you!rich

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