The British pound as you can see has broken down initially during the trading session on Thursday, but then turned around at the 1.3450 level to find a significant amount of buying pressure and ended up slicing through the 1.35 level. Now that we have done that, it looks likely that the market will continue to find buyers, and short-term pullbacks should offer value in a marketplace that continues to bang against the upside. The 1.3650 level above is massive resistance, as it was a significant gap lower. That is a sign that the longer-term “buy-and-hold” traders will come back into play, and because of this the markets continue to see attempts to break out to the upside.
Ultimately, if we do break down to a fresh, new low, then I go looking for more support at the 1.3333 handle, and of course the uptrend line that has been so crucial. Longer-term, I anticipate that the British pound will go looking for the 1.40 level above, and then the 1.50 level. Longer-term traders are probably looking at these opportunities as investments, for the longer-term move that almost undoubtedly is trying to form. After all, Forex markets tend to move in 3 to 5-year cycles, and we are at the long in of those moves to the downside. Remember, the British pound started falling long before the vote to leave the EU, and now I think that we are starting to see the pushback from the longer-term large players.
GBP/USD Video 12.01.18
This article was originally posted on FX Empire
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