The British pound initially tried to rally during the trading session on Monday but gave back the gains to show signs of exhaustion. However, the 1.30 level underneath seems to offer a bit of support, probably more or less of the psychological variety. Furthermore though, I do think that if the market breaks down from here it could go looking towards the 1.29 handle underneath which was an area where we had seen buyers. Ultimately, that is an area that should continue to attract buyers based upon the recent reactions, but you can also see that just above at the 50 day EMA it looks very likely that sellers will continue to return. This makes quite a bit of sense, considering that the market has a lot of things to worry about when it comes to Great Britain and leaving the European Union.
GBP/USD Video 18.02.20
Economic figures in the United Kingdom are a bit better than anticipated, but they aren’t exactly stellar. When in comparison to the United States, they are certainly soft. While I do believe that eventually the British pound takes off to the upside, it may have some work to do before can build up the necessary momentum to take off rapidly. That being said, if we can get a daily close above the 50 day EMA, then I believe that the market probably goes towards the 1.32 handle. A break above there could send the market looking towards 1.35 handle. Expect a lot of choppiness in this area but it seems as if the sellers are remaining very vigilant.
This article was originally posted on FX Empire
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