At the start of the week, I pointed out a wedge pattern on GBPUSD.
Since climbing above the 1.3000 handle on February 19th, the pair has held above the level on a daily closing basis.
Until yesterday’s session…
Thursday’s 1.2983 close puts the pound below 1.3000 which means the area should begin serving as new resistance.
We’re already seeing a few sellers defend this area so far today.
But keep in mind that support and resistance levels in the market are often zones rather than exact prices.
That means 1.3000 could extend as low as 1.2975 or so.
However, I do think the GBPUSD is vulnerable while below 1.3000/50 on a daily closing basis.
Make sure you’re using the same New York close Forex charts I use to trade price action.
If you don’t have five equal 24-hour sessions each week, you’re exposing yourself to false signals.
You can also see where the pair just broke below a short-term upward sloping flag (not to be confused with a bull flag).
A flag like the one below hints at exhaustion from buyers. It’s similar to a rising wedge in that way.
There’s no need to rush an entry, though.
Given the upcoming holiday weekend, I don’t see GBPUSD doing much between now and Monday.
That gives us time to see how the pair reacts to 1.3000 as new resistance.
If it holds, GBPUSD could be on its way to the 1.2800 region next week.
And if the pair closes back above 1.3050 on a daily closing basis, it’s an indication that buyers aren’t done just yet.
It would also re-expose the falling trend line that extends from the year-to-date high.
I won’t do anything here until next week.
I want to see how the pair responds to new resistance over the next 24 to 48 hours, and I’m in no hurry to risk capital before the weekend.
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