The GBPUSD pair has been caught in a sideways trading range, prompting traders and analysts to closely monitor its movements. For several days, the pair has been oscillating between the 1.2575 and 1.2667 levels, a range that has become a crucial battleground for bulls and bears alike.
Consolidation or Continuation?
As the pair continues its sideways trajectory, traders are closely watching the 1.2667 resistance level. As long as this level holds firm, the sideways move could be interpreted as a consolidation phase for the broader downtrend that originated from the 1.2893 mark.
In this scenario, the next potential target area for the bears would be the 1.2555 level, followed by the psychologically significant 1.2400 mark.
Potential Bullish Breakout
While the consolidation phase remains a possibility, traders will be keeping a watchful eye on the 1.2667 resistance level. A decisive breakout above this level could potentially bring the price back to test the resistance of the falling trend line on the 4-hour chart, a critical level that has been underpinning the broader bearish trajectory.
If the pair manages to break through the trend line resistance convincingly, it would confirm that the downside move from 1.2893 has completed at 1.2575, potentially paving the way for another rally towards the previous high of 1.2893.
Key Levels to Watch
In this volatile phase, traders will be keeping a close eye on the following key levels:
- 1.2575 (current range support)
- 1.2667 (resistance)
- 1.2555 (potential downside target)
- 1.2400 (additional downside target)
- Falling trend line (critical resistance)
- 1.2893 (potential upside target)
The price action around these levels will be instrumental in determining the pair’s next move and the potential for a continuation of the downtrend, a potential bullish breakout, or a prolonged consolidation phase.