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Christopher Lewis
GBP/USD

The British pound continues to flex its muscles as we originally sold off yet now it appears, we are willing to find buyers on dips and we have even broken above the psychologically and structurally important 1.30 level. At this point it is likely that we will go looking towards 1.3150 handle, and short-term dips will more than likely continue to be bought. With the new unemployment claims number in the United States coming out slightly bigger than anticipated, that probably is yet another reason to believe that the Federal Reserve will continue to loosen monetary policy and keep it there. If that is going to be the case it should continue to weigh upon the value of the US dollar overall.

GBP/USD Video 31.07.20

The British pound on the other hand seems to defy gravity and has gotten rather parabolic. I do not like buying it at this juncture, although you clearly cannot sell it. We desperately need some type of pullback in order to keep up the momentum, but right now it looks like that is going to be very unlikely. This thing simply will not break down and is apparently unaware that Brexit is still something that people will be dealing with. Nonetheless, price is the truth, and that is really all you need to know, it looks like the British pound continues to go higher and dips continue to offer value. I believe that there is a massive support zone that starts at the 1.2750 level and extends down to the 1.2650 level. If we were to break down below that level it would change a lot of things but right now that seems to be very unlikely.

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

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