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Christopher Lewis

The British pound has gone back and forth during the trading session on Friday, initially dipping below the 200 day EMA. However, we turned around to show signs of life again as the Americans came aboard. At this point in time it looks as if the British pound is going to continue to fight, and a break above the shooting star for the trading session on Thursday would be a very bullish sign, opening up a move towards the 1.2750 level. At this point in time, the market is likely to continue reaching to the upside, because quite frankly it just will not fall.

GBP/USD Video 13.07.20

I could give you plenty of reasons as to why the British pound should be drafting lower, but at the end of the day it seems as if the market is focusing on the Federal Reserve and what it is doing to the dollar. Because of this, this market turns around to rally every time it falls, and therefore it does not make much sense to fight the momentum. That being said though if we end up forming a hammer for the Friday session preceded by a shooting star, that normally means that you are going to go sideways for a short amount of time.

A breakout of that little range tells you where you are going next. If we break down from here, I anticipate that the 50 day EMA, currently colored in red on my chart is going to offer support for those looking to pick up British pounds. We have made a long series of “higher lows”, so if I had no idea what was going on in the world, this looks like a market that wants to go higher.

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

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