Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
GBPUSD is at a pivotal point in this relief rally.
I’ve discussed the significance of the 1.2380 level in recent posts and videos.
It’s the level that supported GBPUSD back on July 17. It then served as resistance between the 9th and 10th of August.
I also mentioned 1.2290 in Saturday’s video.
In fact, I even pointed out that a pullback into 1.2380 and perhaps even 1.2290 this week seemed likely given the recent upward sloping flag.
Watch Saturday’s weekly forecast video for more.
Since reaching our target at 1.2570 (see the September 4 breakout post), the pound has struggled a bit.
This doesn’t mean the relief rally is over, though.
As you probably know, I make decisions on the daily time frame.
Anything that happens before the New York 5 pm EST close isn’t nearly as important as where the market closes, at least for me.
So, if GBPUSD stays above 1.2290 or even 1.2380 on a daily closing basis, buyers are in control, which means I only want to watch for longs.
But if the pair closes below 1.2380, we could see GBPUSD unwind toward the next key support at 1.2290.
As of right now, I’m just waiting this out.
I see no reason to buy the GBPUSD, at least not yet.
I also don’t want to sell given that the pound is hovering between those 1.2290 and 1.2380 support regions.
I also think that as long as the pound is carving higher lows and higher highs, we have to respect the potential for more upside.
If we see the 1.2290 support area break down, then a return to 1.2170 and perhaps even 1.2015 is a very real possibility.