GBPUSD Range Games, a Trap before the Drop

The Exponential Moving Average (EMA) is currently flattening out, which indicates that price action is rangebound and lacking clear directional momentum. This kind of consolidation often precedes a significant breakout. Given the current structure, if the price breaks below the range, it would likely initiate a stronger move to the downside.

One key scenario to watch is a potential deviation above the current year’s high. This could be a false breakout where the price briefly moves above resistance, triggers stop-losses from short positions or attracts breakout buyers, and then sharply reverses. Such a move often traps traders on the wrong side, leading to increased volatility and a swift return back into the range.

Another critical level is the Weekly Open. If price falls back below the Weekly Open and is unable to reclaim it, that would signal a shift in sentiment to the downside. In this case, the Weekly Open transitions from potential support to resistance, confirming a bearish bias. On the flip side, if price finds support at the Weekly Open after a pullback and holds above it, this could indicate strength and offer a buying opportunity within the range.

Until there is a decisive break beyond the established range — either to the upside with sustained momentum or to the downside with follow-through — the best approach is to continue trading within the range boundaries. Fade the extremes, manage risk tightly, and remain patient for a clear directional move.

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