I figured it was only fitting to discuss GBPUSD again given today’s much anticipated Brexit vote.
Last week I pointed out how a close above falling wedge resistance could trigger a move higher. At the time, that level came in near 1.2800.
Buyers got the job done on Friday and extended gains on Monday.
However, those same buyers struggled after reaching the November 22, 2018 high just below 1.2930.
The 1.2930 area triggered a pullback during yesterday’s session. That weakness has carried into today’s session.
But as I mentioned on Sunday, traders need to keep an eye on the 1.2800 support area.
By now, that level could extend as low as 1.2760.
Just keep in mind that we have a momentous Brexit vote today. The event is sure to trigger substantial volatility for the pound.
With the outcome expected sometime after 3 pm EST and the daily close just two hours later, it makes sense to wait for the day to close here in my opinion.
Remember, I use New York close charts so that each session closes at 5 pm EST. These charts are required for trading price action.
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In other words, I don’t suggest attempting to trade the event. Doing so is more gambling than trading.
Even if you get it right, you’ll likely get stopped out before you can realize any profit. Volatility goes both ways, and the spread for GBPUSD is sure to widen.
Regardless, it will be interesting to watch how the pair reacts to former wedge resistance as new support.
And as long as GBPUSD is above 1.2760 on a daily closing basis, the bullish potential must be respected.
Alternatively, a daily close back below former wedge resistance near 1.2760 would re-expose 1.2700.