With the US dollar recovering last week, is it time to consider GBPUSD shorts?
Check out today’s video for my thoughts, including what needs to happen for GBPUSD to move lower and for the DXY to continue its rebound this week.
Unlike the euro, GBPUSD ended last week above its critical support at 1.3100.
But if you caught last week’s videos, especially the Weekly Forex Forecast, you’ll know that the recent USD strength and EURUSD weakness are warning signs for the pound.
So, is it time to look for GBPUSD shorts?
That’s the big question, and I believe it all hinges on 1.3100 this week.
More specifically, 1.3095 needs to fail on a daily closing basis to set up a short opportunity.
A daily close below that level would confirm a fakeout and open up targets like 1.3000.
As mentioned in the weekly forecast video, traders should keep an eye on the DXY resistance area between 102.00 and 102.40.
Testing this zone is likely to attract significant dollar strength.
That doesn’t mean GBPUSD is a buy—far from it.
But I’d like to see the DXY reclaim the 102.00 region this week to confirm lower moves for both GBPUSD and EURUSD.
Until the DXY clears 102.40, that area remains critical resistance for the US dollar.
