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Christopher Lewis

The British pound fell a bit against the US dollar initially during the trading session on Wednesday but continues to see buyers right around the 1.30 level. This is an area that has been important more than once, and quite frankly needs to hold in order for the uptrend to stay intact. I do like the idea of buying dips, but if we were to break down below the 1.30 level on a daily candlestick, then it is possible that we could drop towards the 1.2750 level. That is an area that has been important more than once, and I think it offers 100 points worth of support. With that being the case, I would not hesitate whatsoever in buying down there either. Not only is it a major area of previous resistance, but we also have the 50 day EMA underneath that will offer significant interest as well.

GBP/USD Video 13.08.20

At this point in time, I have no interest whatsoever in shorting the British pound, and I do think that eventually we break above the highs of last week. Once we do, this is a market that could go all the way to the 1.35 handle. With that being the case, I like the idea of finding value and taking advantage of it. The Federal Reserve continues to flood the market with dollars, and that will continue to weigh upon the greenback longer term. All things being equal I have no interest in shorting this pair, at least not until something substantially changes with the attitude of the US central bank.

For a look at all of today’s economic events, check out our economic calendar.

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