GBPUSD is setting up for a major move in the coming weeks, and it all comes down to one key level.
Watch today’s video for my thoughts on GBPUSD and an update on the US Dollar Index (DXY).
GBPUSD is at a pivotal level this week, one that could determine the pair’s next significant move.
Last week, GBPUSD tested descending channel resistance at 1.2540, a level extending from the late September highs and one I highlighted in January.
Despite remaining range-bound, bulls are struggling early in the week.
The pair continues to pressure the key 1.2380 support while making lower highs since February 7th.
A breakdown below 1.2380 would expose 1.2300 and 1.2200, but more importantly, failing to hold the range could trigger a 700+ pip drop.
An open imbalance near 1.1600 from 2022 remains a potential target, an area I’ve had on my radar since December.
This week could be the moment to take advantage of it.
The wildcard is the DXY.
It filled its 2022 imbalance in January and remains below the 109-110 resistance area.
If the DXY fails to break above 109.50, GBPUSD won’t have a path to 1.1600.
For this idea to be invalidated, GBPUSD would need to close above 1.2500 on a daily basis.
Disclaimer: I entered short GBPUSD on Monday, as shared with VIP members.
