The British pound has initially tried to rally during the training session on Thursday but found resistance at the 50 day EMA to roll back over and reach towards the 1.30 level. Ultimately, this is a market that should find plenty of support just around that area as it is a large, round, psychologically significant figure. The market has been trying to grind higher for the last couple of days, but ultimately there is a lot of issues when it comes to shorting the US dollar, but quite frankly the British pound is doing quite well due to the movements in the government and of course the fact that they have the upper hand when dealing with the European Union suddenly. A united front on the government side of the United Kingdom should continue to push this market towards 1.32 handle. If the market can break out above the 1.32 handle, then it opens up the door to the 1.35 level.
GBP/USD Video 17.02.20
However, if the market was to break down below the most recent lows, the market should then go looking towards the 1.28 handle. Below there, the market probably goes looking towards the 1.27 handle which is where the 200 day EMA sits. Ultimately, that is a major trend determining indicator. All things being equal, this is a market that should continue to find buyers on dips because it is historically cheap, and of course eventually the British will get some type of an agreement with the EU. With that in mind I like the idea of buying short-term dips, simply moving in and out of the market.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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