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Christopher Lewis
GBP/USD

The British pound has rallied again during the trading session on Thursday as we have cleared the 1.35 level handily. Now that we are above there, it is likely that the market will go looking towards the 1.3750 level as the 1.36 level has been pierced. At this point though, you need to be cautious as the occasional headline coming out of the Brexit negotiations have thrown the British pound around occasionally. This continues to be the case, and probably will be going into the weekend. That being said, the market is very difficult to deal with presently, and therefore needs to be treated with “kid gloves.”

GBP/USD Video 18.12.20

At this point, pullbacks towards the 1.35 level should be supportive, unless of course we get some type of “no deal” type of finality. I do not expect that to happen and it is obvious that negotiators certainly are at least trying to come together given enough time, so it is very likely that pullbacks will continue to offer value in what is an obviously bullish pair. Furthermore, the Americans are going on about stimulus and eventually that probably comes back into play as well. That has weakend the US dollar against almost everything, so that also has helped this pair, albeit somewhat artificially. With this being the case, I have no scenario in which I am a seller and I believe that support extends all the way down to at least the 50 day EMA which is currently at the 1.3250 level.

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