British Pound (GBP) Making Turn at Inflection Point
British pound currency index...As of mid-day trading on Dec. 26 the pound is bouncing off the 130 level, after dipping to 129.
Shorter-term the upside target is 134 to 135, the area of the Dec. 12 peak. That 134 region is a longer-term resistance area, extending back to mid-2018. A continued rise above 134 and 135 would indicate that the GBP is rising to its next major resistance level near 143.
A continued decline is bearish, as all those who speculatively bought GBP on the initial upside breakout would be trapped and pressured to sell, putting further downward pressure on the GBP.
The selling pressure begins to mount below 130, with a move below 128 likely causing a sharp decline as a significant number of stop losses get hit.
Disclosure: long GBPJPY on an unrelated strategy.
Shorter-term the upside target is 134 to 135, the area of the Dec. 12 peak. That 134 region is a longer-term resistance area, extending back to mid-2018. A continued rise above 134 and 135 would indicate that the GBP is rising to its next major resistance level near 143.
A continued decline is bearish, as all those who speculatively bought GBP on the initial upside breakout would be trapped and pressured to sell, putting further downward pressure on the GBP.
The selling pressure begins to mount below 130, with a move below 128 likely causing a sharp decline as a significant number of stop losses get hit.
Disclosure: long GBPJPY on an unrelated strategy.
Cory Mitchell, CMT
Stock and forex trading insights at tradethatswing.com/
Stock and forex trading insights at tradethatswing.com/