Daily Price Action
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GBPUSD: Weekly Sell Signal on Tap for Next Week?

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Important: I use New York close charts so that each day closes at 5 pm EST.

Click here to get access to the same charts I use.

On Sunday, I mentioned how the 1.3070 area might be a significant one for GBPUSD. Given the pair was trading below it at the time, it meant 1.3070 was resistance at the start of the week.

But buyers didn’t hesitate during Tuesday’s rally. The pound went on to close the session above 1.3070. Wednesday’s session then caught a bid from the area which helped confirm the area’s significance.

That ended rather abruptly yesterday. GBPUSD bulls surrendered 1.3070 as new support following the 1.3060 close. Remember, I use New York close charts which you can get by going here.

Today’s session has come under some pressure, but not enough to test the resilience of sellers. Update: That’s changed since I started writing this post with GBPUSD now under quite a bit of pressure.

So we’re left asking, how significant is 1.3070?

Said differently, does yesterday’s close below it suggest a move lower next week?

We don’t have enough evidence to make that call just yet. However, I will say that I believe the 1.3070 level is a significant one for the pound. It’s broken down a few times in the past, but the area has served as a pivot of sorts going back to the June low.

Some weakness here next week would agree with what we’ve seen so far from the EURUSD as well. Granted the pound has been the stronger of the two since late August, but the idea of a stronger U.S. dollar is present nonetheless.

The counterargument to a weaker GBPUSD is the aggressive bounce from 1.2700. But let’s not get ahead of ourselves.

Yes, the pound has been on a tear since October 31st, but the weekly time frame tells a different story.

GBPUSD weekly downtrend and consolidation

Despite buyers’ best efforts, they’ve been unable to reverse the downtrend that began with the massive bearish engulfing week in April.

I see the last three months as nothing more than consolidation. In fact, the price action since mid-August looks eerily similar to the range that developed between late June and September of 2016.

That’s just an observation. I’m not suggesting GBPUSD is about to give up 1,000 pips in a single week.

To be confident that yesterday’s close below 1.3070 was significant, we’ll need to see sellers defend it as new resistance. That hasn’t happened yet, so for now, it’s a waiting game which is just as well given that it’s Friday.

Another thing to keep an eye on is how this week finishes up. Right now, sellers are on the brink of carving a 200-pip bearish pin bar on the weekly chart.

If sellers can secure a close below 1.3000 today, we may have a bearish signal going into next week. As always, I’ll be sure to provide an update on Sunday before the market opens, so be sure to sign up for alerts.

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GBPUSD daily time frame

Leave a Comment:

36 comments
PIERRE MIFSUD says

To me it seems to reach the 1.2815 handle by next week
Well done for your analysis Justin!

Reply
    Justin Bennett says

    That’s very possible. Cheers, Pierre.

    Reply
    Khaya says

    @Pierre The timing of when price will get there is not important,what’s important is managing risk and being patient till price reaches your target .

    Reply
      Justin Bennett says

      So true. Well said, Khaya.

      Reply
Joseph says

Thank you Sir. It seems like it’s on its way sir.

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    Justin Bennett says

    You’re welcome.

    Reply
      Joseph says

      Sir, I’m looking at GBPCAD at the moment and it seems like a H&S has formed on the daily timeframe. It seems that it retested the neckline resistance several times now. Can you see that as well sir or is it only me?

      Reply
      Prof says

      do you manage fund?

      Reply
        Justin Bennett says

        No, I don’t.

        Reply
Nadeem Khalid says

can i enter my sell entry from this current market price?

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Emmanuel says

Very good analysis.

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    Justin Bennett says

    Cheers, Emmanuel.

    Reply
Latoya says

Thank you very much Justin. Blessings…

Reply
    Justin Bennett says

    It’s my pleasure, Latoya. Have a great weekend!

    Reply
alex says

I will be wating for your comments for next week , plus If ypu can please do some comments on gbpjpy and eurjpy. I thank you alot. alex andalibfard

Reply
    Justin Bennett says

    I’ll comment on them if something catches my attention as always.

    Reply
Howard Hill says

Justin, can you make the charts bigger so they show more clearly the prices on the Y scale, or perhaps add a magnifying tool?

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    Justin Bennett says

    The issue with that is that it slows page load times. That becomes an issue for those on slower mobile networks.

    The key levels should be easiest enough to find by comparing your chart to mine. Apart from the ones I label, of course. 🙂

    Reply
Jenerali says

i am waiting to see the reaction at 1.2925/35 area. I also had a trend line drawn there (i don’t know where i got it from lol), i break below it would likely expose 1.2700 area

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    Jenerali says

    ***a break below it***

    Reply
Fabio Ramirez says

Saw this pattern yesterday. I am looking to sell the retracement, using the four hour chart!

Reply
    Justin Bennett says

    Cheers, Fabio.

    Reply
nik says

Hi Justin. Would this be an indication that all is not well after all even after BREXIT is finalised?

Reply
    Justin Bennett says

    I don’t think we need to connect that many dots if you catch my meaning.

    Reply
Michael Kuczynski says

Excellent article, also great call on WTI Crude.

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    Olorunsola Tolu says

    Yes. I guess you are Justin’s premium member? Justin is a blessing to our world. But I think I need to believe in my strategy more. I should always use 4hrs candle for retrace. I also still over trade. My God help me. Maybe I should go and pray to God…

    Reply
      Justin Bennett says

      If you’re using the 4-hour chart, that may be your problem right there. Try sticking to the daily time frame. Once you get good enough you can move to the intraday charts, but not before.

      Crawl, walk, run.

      Reply
    Justin Bennett says

    Thanks, Michael. Nice to hear WTI worked out for you.

    Reply
Olorunsola Tolu says

In summary what are secret of consistent Fx profits. I tend to loose all my profits too fast in my next trade

Reply
    Justin Bennett says

    It’s all the same stuff I’ve written about on this website. Stay patient, keep bets small, don’t overtrade, use a favorable risk to reward ratio, etc.

    Reply
derrick says

i went short on this very pair since 25th last month but it has started showing some good signs

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leo says

Gbp/usd going down if it breaks 1.29300

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Yohana says

of course Leo

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Caroline Paris says

could that be an inverse head and shoulder in formation?

Reply
    Justin Bennett says

    On what currency pair?

    Reply
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