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Over the last several months, the GBPUSD has been swinging up and down within the confines of a trading range between 1.2100 and 1.2770. However, there is a key level of support dividing this range, right through 1.2400 area, and recently price has been testing this level and remaining buoyant above it. Today, as we can see in the chart below, price dipped below that level initially, before reversing and ending the day higher, forming a reversal bar known as a pin bar reversal. This price action pattern indicates that lower prices were rejected and that price could continue higher from here. Given the key support level this pin bar formed at, it has plenty of ‘weight’ behind it and so we believe there’s strong potential for prices to push higher and re-test the highs near 1.2700 – 1.2770 in the coming days.
This article was written by Nial Fuller. Nial is a highly regarded professional trader and author. He is the founder and CEO of Learn To Trade The Market, the world’s foremost trading education resource.