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GBPUSD Ready to Pull Back?

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Important: This site uses New York close charts so that each 24-hour session opens and closes at 5 pm EST. Get access to the same charts Justin uses.

On Saturday, I made a video that included the GBPUSD and the effect Friday’s sub 1.3340 close could have on the pair.

I stated that Friday’s close means 1.3340 is still intact as resistance and could, therefore, attract sellers this week.

Notice how Monday’s session carved a long upper wick.

That was further evidence that 1.3340 was still holding as resistance for the pair.

Today’s selloff is confirmation that sellers aren’t giving in just yet.

If you watched Saturday’s forecast video, you know that 1.3340 is a long-term range top for the GBPUSD.

So if the pair was going to selloff on the way up, that’s where I’d expect it to happen.

We also have what appears to be an ascending channel that extends from the year-to-date low in September.

If this channel is any indication of the pound’s future direction, we could see prices rotate lower, perhaps much lower.

That wouldn’t be a huge surprise, though.

The GBPUSD has had a heck of a run, including the most recent breakout from the 1.2980 range top on December 3rd.

In fact, the pair is still up 1,190 pips since its year-to-date low from just fifteen weeks ago.

Given the aggressiveness of today’s selloff, I wouldn’t be surprised to see the GBPUSD test 1.2980 this week.

However, I do think it’s going to take a sub 1.3150 close to do it.

And if this retracement really gets going, we could see a retest of ascending channel support, which is currently near the 1.2770 area.

This doesn’t mean the GBPUSD short-term rally is over, but today’s selling pressure does suggest the pair is ready to pull back, in my opinion.

Want to watch the GBPUSD video I just released in the member’s area?

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GBPUSD ascending channel on the daily time frame

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10 comments
Justin Bennett says

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ali says

thanks for the update sir.

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    Justin Bennett says

    You’re welcome.

    Reply
Ashraf says

thanks a lot

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Ivan Baychev says

Hi Justin,

Thanks again – your absolutely RIGHT

Reply
    Justin Bennett says

    Anytime, Ivan.

    Reply
Desmond Nhlanganiso Zulu says

My comment is more of a question.
When price gets to the key levels, do we take trades or we wait for a daily close and scan for an opportunity like an engulfing or a pin bar (daily timeframe)?

Reply
    Luthfi Zain says

    Hi Desmond, I was asking the same question. But in real life it’s all up to you. In fact no strategy has a 100% success rate. Even if the price does break or bump, many times it doesn’t reach your drawn target.
    There are people trading continuation and there are people trading reversal using this exact same strategy. Both of them can either success or fail. It depends on your money management. Whichever you choose if you manage your money well, even a 60% success rate could still be a profitable.

    Reply
    Justin Bennett says

    It depends on the market structure you’re referring to. Every situation is different.

    Reply
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