GBPUSD is locked between key support and resistance ahead of Thursday’s rate decision, but will last week’s rejection from 1.2800 carry over this week?
Watch today’s video for the key levels and targets, and get the latest on the DXY.
GBPUSD is testing a short-term level today that extends from the May 16th closing price.
That’s the bottom of an ascending broadening wedge that occurred at the 2021 trend line we’ve discussed in recent weeks.
Ascending broadening wedges that develop after an extended move up often signal fatigue, and we’re seeing signs of that from GBPUSD.
On the other hand, the pair remains above 1.2685 support, and the DXY is holding below 105.60 resistance.
With that in mind, now is not the time to get overly bearish on GBPUSD, in my opinion.
However, as mentioned since the June 7th bullish reclaim from the DXY, I remain cautiously bullish on the US dollar.
Nothing about the current price action has changed my mind on that, at least not yet.
For GBPUSD, we need to see the pair trade below 1.2685 on a daily closing basis to flip the level to resistance.
Below that is key support near 1.2560.
The DXY needs a sustained break above 105.60 while that’s occurring to signal dollar strength.
Alternatively, a GBPUSD above 1.2800 and a DXY below 104.80 would suggest a stronger pound and a weaker dollar.
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