The GBP/USD exploded higher today following the price action false-break that we discussed in our weekly commentary. This market is so strong now we would not be surprised to see it break above 1.6800 in the coming days / weeks. We will remain cautious though, as a false-break of 1.6800 on the daily timeframe would be a bearish development given how significant this resistance level is.
Despite the big sell-off that occured in equity markets over the last 3 days this index managed to produce a false-break of key support. We must be wise in these scenarios and listen to what the martket is telling us rather than hope for something to happen just because we have open positions. For that reason I would recommend closing any short positions on this index as we may well see a move back to test 1880 / 1900 later this week. This market is really range-bound now and we'd need to see a daily close below 1830 to start to think otherwise.
This price action trading commentary is published by Lewis Barber and represents his current view of the forex market.