GBPUSD could be setting up for one of the biggest trades of 2024.
The pair has been sideways since December, but the chart structure since December 2022 is one of the cleanest I’ve seen in a while.
In today’s video, I discuss two massive GBPUSD channels that are a must-watch, what it will take to confirm the setup and the latest on the US Dollar Index (DXY).
Watch the video below and scroll down for the annotated charts and analysis.
GBPUSD could be setting up for a 1,000-pip drop this year, but a few things must happen first.
The chart structure since late 2022 shows us two massive channels, one descending and the other ascending.
The pair has retested the bottom of the ascending channel three times since late November.
However, the uptrend since October remains intact, with GBPUSD carving higher highs and lows.
So, confirming a bearish reversal will take a first lower high and lower low.
Specifically, that means a sustained break below key support levels like 1.2600 and 1.2500.
At the same time, the DXY needs to reclaim 103.50 and 104.20 resistance.
If those things occur, we will likely see the pound trend significantly lower this year toward the 2023 lows and potentially even lower.
The bottom of the descending channel I discussed in today’s video could be one longer-term target.
Alternatively, a sustained break above descending channel resistance near 1.2760 and a DXY below 102.60 would likely invalidate this idea.
Next week’s Federal Open Market Committee (FOMC) meeting will likely have a pivotal role in this GBPUSD idea.
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