The British pound has exploded to the upside during the trading session on Wednesday, clearing the 1.31 level handily. As I write this article, we are hanging around the 1.3150 level, and therefore I think at this point it’s very likely that the pullbacks that will be coming should end up being buying opportunities. The question now isn’t so much as to whether or not the market should go a bit higher, the fact is that the Bank of England has an interest rate decision later this month and people are trying to decide whether or not they are going to cut those rates.
GBP/USD Video 23.01.20
The uptrend line underneath continues to offer a source of support, so at this point I don’t have any interest in shorting this pair until we get well below it. You can make an argument that dips are to be bought going forward, and then eventually we could go to the 1.35 level above which is the recent high that we had seen after the election results giving the Tories control and the United Kingdom. The candlestick during the trading session on Wednesday shows just how bullish the pressure is underneath, so I believe and looking for value at this point in time. All things being equal, this is a market that I don’t have any interest in shorting anytime soon unless of course the Bank of England ends up cutting rates later this month and essentially signaling that they are going to do more of the same. I don’t think that happens anytime soon, so I remain bullish but recognize it will be very noisy.
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This article was originally posted on FX Empire
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