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GBPUSD is bouncing from a level I discussed in Saturday’s video.
The 1.2290 area is one that served as resistance in late August before flipping to support following the September 5 close above it.
However, GBPUSD buyers face an uphill battle.
The latest selloff from 1.2570 resistance has been relatively aggressive.
I discussed the likelihood of a 1.2570 retest during the pair’s September 4 breakout from channel resistance.
We’ll see if last week’s selling pressure spills over into this week, but I do think it’s going to come down to one level.
What level is that, you ask?
If you watched Saturday’s Forex Forecast video, you know that 1.2290, and perhaps even 1.2240 could be areas that trigger a bounce this week.
The latter is the bottom of a short-term ascending channel.
However, that pattern isn’t complete just yet.
So far, we only have the late-August and mid-September highs to work with, along with the year-to-date low at 1.1958.
Whether or not this area between 1.2240 and 1.2290 will trigger the next leg higher is anyone’s guess.
But I do think GBPUSD bears need to be careful here.
I wouldn’t want to sell the pound while above that 1.2240 region.
Mostly due to the fact that key support is just below today’s price, but also because I’m not convinced this relief rally is over.
If the GBPUSD can retest 1.2380 resistance and close above it on a daily closing basis, we could see the pair rotate higher toward 1.2570.
Break 1.2570 and there isn’t much standing in the way of a 1.2770 retest.
That said, it all comes down to whether or not buyers can keep GBPUSD above 1.2240/90 on a daily closing basis.
Do that, and we could see more from buyers.
But if buyers fail to hold the price above 1.2240 on a daily closing basis, we will likely see GBPUSD at 1.2170 or even 1.2015 in the coming days and weeks.