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Important: I use New York close charts so that each 24-hour period closes at 5 pm EST.
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The GBPUSD is finally making its move. Since the 2nd of May, the pound has been confined to a 140 pip range between 1.3460 support and 1.3600 resistance.
At the moment, sellers have extended today’s lows to levels not seen since late December of last year. However, with six hours to go until the session close at 5 pm EST (New York close charts), anything can happen.
Of course, if you think a 4-hour close below 1.3460 is enough to get the job done, then the GBPUSD has already broken down. As for me, I’ll need to see a daily close below the level before further deliberation.
If sellers manage a 5 pm EST close below 1.3460, I’ll begin watching for a retest of the area as new resistance. Depending on your outlook here, that retest could present an opportunity to get short.
The next key support level comes in at 1.3300. It’s a significant area for the pair as you can see from the price action between mid-October and December of last year.
It’s a waiting game for now, but a daily close below 1.3460 could open up 160 pips of real estate, so it could be worth the extra patience.
Bear in mind that we could see an increase in volatility during Wednesday’s release of the FOMC meeting minutes at 2 pm EST. There are several scheduled speeches from the BOE’s Carney in the final 48 hours of the week that could also shake things up.
Additionally, Fed Chair Powell is due to speak on Friday at 9:20 am EST, the same time as Carney. Be sure to check the event calendar for further details on these events.
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