In the most recent weekly forecast, I mentioned the 1.4350 level on GBPUSD. This has been an influential area since the second week of 2016 and continues to play its role as a tipping point between buyers and sellers.
The February 1st close above the key level hinted at the possibility of a major correction for the pair in the midst of the larger downtrend that has been in place since June of last year. However, the bulls only managed to advance the pair by 300 pips before succumbing to selling pressure at 1.4660.
This week hasn’t gone well for buyers of the pound either. Tuesday’s session saw the pair slip back below the 1.4350 handle, putting additional bearish pressure on an already weak currency pair.
While yesterday’s rejection is hardly a proper sell signal, it does indicate that sellers are willing to hold this area as new resistance. As such, any bearish price action from the 1.4350 level could make for a compelling short opportunity.
Looking lower, key support comes in at the 2016 low of 1.4078 with an additional (minor) level of support found near Wednesday’s low of 1.4234.
