Chart of the day

GBPUSD is testing a critical medium-term resistance of 1.2507. A break here is required for an upside continuation. A rejection here could lead to a swing reversal lower again and a test of 1.1820

I see this still as a pullback in the short-term fourth downside wave before a continuation lower in the fifth wave. We need to see a clear confirmed break above 1.2500 for the downside extension in the fifth wave to be invalidated and to see an upside continuation above 1.2600.

Long trades could be opened upon a confirmed break above 1.2550 with a stop loss below 1.2480. Short trades should be opened in the case of a rejection here and a break below 1.2400. These are a key resistance/support level so use small sizes and tight stops.