The British pound drifted a bit lower during the trading session on Tuesday, reaching down to the 1.35 region, which has of course offered a significant amount of support. I think at this point, I would anticipate a bounce, but I also recognize that we could break down below here and go looking for even more significant support below. I think that the market has a massive amount of support near the 1.3333 handle, so I would not be concerned about the uptrend until we break down below that level at the very least. Beyond that, there is an uptrend line just below, and that of course is an area where we could see the trend either be confirmed, or possibly changed completely.
I believe at this point, a lot of the movement in this market as dictated by the anti-US dollar sentiment, and the perceived historical cheapness of the British pound. The 1.3650 level above is massive resistance, so if we were to break above there I think that the longer-term “buy-and-hold” investors start to get back into the market and aiming for the 1.40 level above, perhaps even much higher over the next several years. I think that the market is likely to see buyers every time we dip, based upon value. I don’t have any interest in shorting this market, I think that the longer-term outlook for the British pound is much higher from here, but patience will be needed to realize significant gains. Because of this, jumping in slowly is the best route.
GBP/USD Video 10.01.18
This article was originally posted on FX Empire
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