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I’m going to get started today on the Greater British Pound versus the US Dollar [GBPUSD]. Starting here on the Daily Chart, I have scrolled way back in time so we can get a historical perspective for this currency pair. We’re on the Daily Chart, and I’ve gone all the way back into 2009. Middle of the chart, vertical, dashed, red line that you see right here on the middle of the chart. You go all the way to the top of the chart where the horizontal red line is and you could see the marked high up here into the 1.7040-level.
There’s two lines up here. The black line is at 1.6988. That’s the one just underneath the red line. 1.6988, and then the red line is at 1.7040. That will be important as we scroll forward to today, but keep in mind that this is back in 2009. Now let’s go ahead and start scrolling forward. Keep in mind that horizontal red line. We haven’t seen it yet again, until right here at current time. We’re back all the way at the current time, and there is that red line once again coming into view.
Now, over the past several weeks, I’ve been discussing this long-term uptrend and telling you, over the past few videos that the trend hasn’t change. We have to remember what the trend pattern is. The trend is not the trend line. The trend is the pattern of price that we’re seeing within that trend. So, we see higher highs and higher lows within this trend. And even over the past few days, we continue to see rising highs and rising lows, a new high being made.
We saw a break of resistance high just a few days ago and a continuation of the trend. So, we have two areas that we want to pay attention to. We’ve already looked at them from 2009. 1.6988 is where all the candle bodies in 2009 stalled. We did see a couple of spike wicks pressing all the way to 1.7040, so that’s why there’s two lines there. The bodies stopped at 1.6988. The wicks stopped at 1.7040. That’s going to be our next resistance zone. And if you’ve been around for any amount of time, watching my videos, especially in the Trade Room, you know that these highlighted zones highlight areas of decision, where the market makes a trading decision whether to continue or reverse, a bounce or a break off of these levels. So that will be our next decision zone, between 1.6988 and 1.7040. I would suspect that this will likely be resistance for the GBPUSD as history has shown us all the way back in 2009.
So, if you’re in a buy in the direction of the trend, then you want to consider, as it approaches the upper-1.6900s, towards the 1.7000-level, protecting profit. Whether closing trades or simply moving your stop up to protect that profit, that’s what you want to do. If you’re not in a buy, this doesn’t become an ideal scenario to buy it because you’re challenging into resistance. So, it’s likely that if you’re already in a buy, you’re protecting profit. If you’re not in a buy, you’re not thinking about buying right now. More likely, you’re going to be now watching for resistance and potential clues to maybe short-term intraday reversal or maybe even long-term reversal as we find resistance at that historical level from 2009.
Zoom it in one time here on the Daily Chart. You could see this a little bit closer. I could put a couple of additional highlights here just to give us an idea. Over the past couple of days, we can see this area right here, and I’ll change the color. Let’s make it the blue color. We can see that this was a little bit of a resistance over the past couple of days. We’re now above that. That goes between 1.6866 and 1.6897. That was the blue-shaded area, and now let’s go ahead and add in this top shaded area between the red line and the black line. This will be our resistance for the day today.
Gold color there. That will now be our resistance for the day today. So, if you’re going to be following this currency pair, it’s likely – let’s go ahead and put a couple arrows – that your support is down here where the blue-shaded area is from yesterday. You’re going to be looking at support here into this blue-shaded area, and then you’re going to be looking at resistance at this gold-shaded area.
Of course, if it ever breaks, and I think it’s going to have a tough time breaking through 1.7040 and that yellow zone, but if it ever breaks above there, we’ll look for a continuation of the uptrend. So, for the intraday today, if you’re in a buy from the blue or the pink or the green zone down at the bottom, then you’re protecting profit as it goes back up. As it challenges this yellow-shaded area, I would be discouraged from buying it any further, but more likely, at this point, now looking for resistance and clues to reversal. If you do decide to sell it at some point between 1.6988 and 1.7040, then you’re going to be targeting back down here towards the blue-shaded area as your first support target. That also is where the longer-term trend line comes into play.
Now, the Forex Black Book has been green. It has been going up in the direction of the Forex Black Book trend bar at the very bottom of the chart. I don’t think that you’re likely to see a new green arrow today with the market all the way at the top of the chart. Remember: buy low, sell high. That applies with the Forex Black Book indicator. If you’re looking to buy with the green trend bar, you actually want it to go low to a lower point; then you’ll buy it to go back up. You don’t really want to buy at the top of the trend. Even if you don’t use the Forex Black Book, that really helps you identify lower risk, higher reward opportunities if you buy low, sell high.
So, here on the GBPUSD, if you’re looking to buy it, it’d be more likely that you’d look to buy it on a dip to support, down there towards the blue-shaded area. If you’re already in a buy, you’re targeting the yellow-shaded area, protecting profit. If you’re not in a trade at all here on the GBPUSD, it’s likely the closer you get to that yellow-shaded area, you’re going to be watching for resistance and clues of reversal for the GBPUSD.
It doesn’t really change it, but let’s go ahead and go down to the 4-Hour Chart. It doesn’t change the outlook here is what I’m trying to say. We can squeeze it out so we can see this a little bit better. I’m going to scroll or zoom out just one time. So, there is the yellow-shaded area. Again, both of those lines – 1.6988 and 1.7040 – are from 2009, the last time the market was in this zone. We could see the congestion over the past few days into the blue zone here. Then that becomes our support. So, again, if you’re looking to buy it, I would be discouraged from buying it here into the upper-1.6900s. More likely looking for resistance, possibilities of reversal for this to go back down.
If you bought it anytime over the past few days, I actually bought it into the pink zone on Friday, capturing some profit before the weekend. At this point, it would’ve been much more profitable if I would’ve stayed in it, but was happy with the profit that I made before the weekend. Again, your next best opportunity to buy it would likely be back down here towards the blue-shaded area for the GBPUSD today.
