The British pound initially broke down a bit during the trading session on Monday, but it seems as if the 1.29 level is trying to offer a bit of support, so therefore it’s likely that the market will try to go and look for a bit of strength. At this point, I believe that the British pound continues to be thrown around due to the Brexit negotiations and of course the fact that it is being traded against the US dollar. The candlestick is starting to form a little bit of a hammer like shape, and that could be a good sign to go higher. Overall, the 1.30 level will attract a certain amount of attention, so be aware that the sellers could come in at that point. However, if the market was to break above the 50 day EMA, it’s likely that it will go looking towards 1.32 level after that.
GBP/USD Video 25.02.20
To the downside, if the market breaks down below the 1.2850 level, that could send this market down towards the 200 day EMA but it is going to take some time to get there. The US dollar of course is relatively strong, as there are a lot of fear around the world. Ultimately, the market is likely to find a lot of noise in general, but longer-term I do believe that the British pound will try to go looking towards 1.35 handle. However, there is a lot of work to do to change attitudes and therefore I wouldn’t hold my breath for that move to happen in the short term. It does look like we are trying to find a bit of a base year, and that is almost always a longer-term process.
This article was originally posted on FX Empire
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