British Pound Testing Major Support Region Against US Dollar

The British pound has initially tried to rally during the last couple of days, selling off later. You can see that we have broken down during the trading session on Friday, but we do have a little bit of a fight going on, as we have bounced just a bit. That being said, I think we are about to make an explosive move one way or another, and quite frankly things are starting to look shaky from a risk appetite stance around the world. If we break down below the Friday candlestick, I think at that point in time we would probably see the US dollar strengthen not only against the British pound, but multiple other currencies.

GBP/USD Video 24.01.22

The 1.35 level underneath would of course be a large, round, psychologically significant figure that a lot of people would pay attention to, and it would attract a lot of attention in general through the media. The 50 day EMA is hanging around the 1.35 level, so that also makes it that much more important. To the upside, we would have to break through the top of those two shooting stars to get overly bullish, and at that point in time we would take a serious look at the 1.37 level above. Breaking above there of course would establish a major uptrend just waiting to happen, but right now it looks like this is all being threatened. In fact, we are starting to see the possibility of all of this being a “false breakout.” We should know in the next few days.

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