The British pound has shot straight up in the air during the trading session on Friday again, in complete defiance of a lot of profit-taking when it comes to shorting US dollars around the FX world. Having said that, I think that we are probably looking at a scenario where we will eventually have a sharp correction, but that sharp correction is when those who take a longer-term outlook will be buying.
GBP/USD Video 03.08.20
I would love to see a pullback to at least the 1.30 level at this point in order to pick up the market at a better price. Murphy’s Law dictates that as soon as you buy this pair near the 1.3150 level, it will turn around and fall 500 pips. Chasing the trade is without a doubt the easiest way to lose money in the markets.
That being said, you also have to be willing to let this thing just take off and check it every day in order to find an opportunity. Right now, the risk to reward ratio is not in your favor, and if we see the market continue to go higher, then you will know that the pullback is going to be even more drastic. As the great Jesse Livermore one stated, “Sometimes we get paid to sit and wait.” That is exactly how I feel about the British pound right now, but if you are already long of this market, clearly there is no reason to get out.
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This article was originally posted on FX Empire
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