British Pound Continues to Skyrocket

After the CPI numbers came out as anticipated in the United States, the US dollar took a bit of a hit, and of course the British pound has been a big beneficiary as the UK looks to be the most likely candidate to exit the Covid crisis first when it comes to the larger economies. That being said, the 1.37 level above could offer a bit of resistance, so I do not necessarily think that we go straight up in the air. Ultimately, I like the idea of buying on dips, especially near the 200 day EMA. Keep in mind that the 200 day EMA is an indicator that a lot of people will pay attention to, so it would not be surprising at all to see this market look at that as a bit of a floor underneath. Ultimately, I think the market will continue to be very noisy, but certainly favor the upside.

GBP/USD Video 13.01.22

If we were to turn around a break down below the 200 day EMA, I think there is also a significant amount of support near the 1.35 handle as well, so you should probably keep an eye on that. Ultimately, I think this is a market that continues to see plenty of chop, but it certainly looks as if we are going to make a serious attempt to break above the 1.37 level. If we can, then the 1.38 level is the next barrier, and after that we simply just take off to the upside and the trend changes completely. It is worth noting that we have recently broken through a downtrend line that could attract even more attention to this market.

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