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Christopher Lewis
GBP/USD daily chart, October 03, 2019

The British pound continues to show signs of choppiness right around the 1.2250 level, an area that has been supported and resistance in the past. Quite frankly, this is a very choppy and noisy market right now, so it is a bit difficult to deal with. Most of what you are seeing as far as choppiness is due to the fact that Brexit continues to be a major issue. Beyond that, the market is set up technically for a move lower although the last couple of candlesticks are fighting that trend. If the market does break down below the bottom of the Tuesday session, then the “trapdoor” could open up and send this market much lower, perhaps down to the 1.20 level which was a large, round, psychologically significant figure.

GBP/USD Video 03.10.19

To the upside, we have the 50 day EMA which could cause a lot of resistance, so it’s not until we break above that level that the market would be free to go looking towards the next major resistance barrier, the 1.25 handle. All things being equal, this is a market that should continue to be very choppy and noisy, and of course a sudden headline could send this market rocketing in one direction or the other. Because of this, you should keep your position size rather small when trading the British pound against anything.

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