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Christopher Lewis
GBP/USD daily chart, November 06, 2019

The British pound has tried to rally during the trading session on Tuesday, but it was a rather lackluster session as we couldn’t get anywhere. Looking at the choppiness, it suggests that perhaps the market is simply going to bounce around below the 1.30 level, which of course is a large, round, psychologically significant figure. Beyond that, it is also an area where we have seen a lot of structural support and resistance in the past. With that being the case, it makes quite a bit of sense that we will continue to see noisy trading behavior in this area.

GBP/USD Video 06.11.19

If we were to break above the 1.30 level, the next target is the 1.33 handle, and then eventually the 1.38 level. That being said, we need some type of catalyst. It now looks as if we are less likely in the near term to get a “no deal Brexit”, so that as part of the relief rally that we have seen. After this recent move though, it looks as if we are going to continue to see a lot of buying underneath. The 200 day EMA of course will offer support but then again even if we were to break down below there the 1.25 level underneath would be massive as far as structural support is concerned as well.

It’s going to be very choppy but looking for value and buying on dips probably works out the best in this pair. It’s not as if the rest of the world doesn’t realize that the British pound has bottomed also.

Please let us know what you think in the comments below

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