Daily Price Action
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GBPUSD Shorts Favored Below 1.2290

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The GBPUSD is at risk of closing the day below the 1.2290 region.

If you watched Saturday’s Forex Forecast video, you know that 1.2290 was a “must hold” area for buyers.

It’s the intersection of ascending channel support from the year-to-date low and a horizontal level that has been a factor since late August.

In fact, the 1.2290 area has been influential as far back as October and November of 2016.

You also know from Saturday’s video post that I’m not surprised to see the pound breaking down today.

I pointed out the “heavy” price action above the 1.2290 support area in that video, noting that it often signals a breakdown.

A daily close below this area would signal weakness for GBPUSD.

It would also open the door to the next key support around 1.2170.

Furthermore, this week’s decline could be the start of the next leg lower within the broader downtrend.

Remember that GBPUSD has been trending lower since April 2018.

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A look at the weekly or monthly time frames shows how the pound has actually been losing ground against the greenback since late 2007.

That means this latest relief rally could be nothing more than a mere correction following the impulsive selloff earlier this year.

Again, watch Saturday’s video to see how these corrections since the middle of last year have led to aggressive selloffs.

So, is this the beginning of the next selloff?

As long as GBPUSD remains below that 1.2290 region, I’d say the answer is, yes, at least from a purely technical perspective.

Key support comes in at 1.2170 with a close below that exposing the year-to-date lows near 1.2015.

Alternatively, a daily close back above 1.2290 would keep the relief rally intact a while longer.

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GBPUSD key levels on the daily time frame

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24 comments
Justin Bennett says

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Reply
    Aris Chidubem says

    Please Sir, you do mention of using new York stock market which open and by 5 pm est. My question is if I want to trade (buy/sell), on which stock market should I place my trade?

    Reply
Praise says

well noted .thanks a lot

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Hwok says

Sir,
Which moving averages you are using simple or exponential

Reply
    Justin Bennett says

    10 and 20 EMAs.

    Reply
Emmanuel IDOGEI says

Thank you Justin. You make the Forex world a better place for us with your analysis.

Thanks again.

Reply
    Justin Bennett says

    You’re welcome. Thanks for the kind words.

    Reply
LazzyeyeTrader says

Thanks to Justin I’m once more confident to say I’m starting to see light thanks a lot brother

Reply
    Justin Bennett says

    Great to hear!

    Reply
John Paul says

I actually missed a good opportunity to sell the cable today. I didn’t know that a Bearish Reversal PIN Bar formed last night.

Anyway, I will look to sell once price closes below 1.2170.

Thanks, Mr Justin

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Aris Chidubem says

Please Sir, you do mention of using new York stock market which open and by 5 pm est. My question is if I want to trade (buy/sell), on which stock market should I place my trade?

Reply
Sushant says

I think this is a bear trap. Cable is expected to move to the upside after reaching 61.8% Fibonacci retracement level. It may just go a little lower than this level and resume its upward movement. We need to be careful.

Reply
    Justin Bennett says

    Anything can happen. I’d be more concerned about the lack of a favorable risk/reward ratio. It’s why I’m not interested in shorting GBPUSD right now.

    Reply
Samuel says

Thanks for the up dates please.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
Saurin says

How to know when breakout come? Like current eurusd yesterday back from 90 level again come to 90 level dayafter break 90 now again under 90 lever how??

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Klaas says

Thank you sir for your analysis, may great God bless you more for the great work you do. Some of us we have been scammed by other people in this industry.

Reply
    Justin Bennett says

    You’re welcome.

    Reply
sifiso says

Hi there! The pound-dollar has cemented the low of q4, breaking the initial high of this quarter with only 2 4hr bars( market maker shifting away from the low of the month a few days after he issued a bearish pin bar)..I bet a lot of ill-timed retail-trader stop losses where just above that pin-bar. I am expecting another push to the high later this month!…

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sifiso says

Hi there! I guess the push I was expecting just came early! The pound is being bought by smart money.

Reply
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