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Christopher Lewis

The British pound has rallied a bit during the trading session again on Thursday, breaking towards the 1.3150 level. That being said, we are heading against a significant short-term barrier, so the market pulling back would not be a huge surprise. At this point, the 1.30 level underneath should be massive support as it was previous resistance. At this point, there should be plenty of buyers in that area, looking to pick up the British pound “on the cheap”, and of course short sellers trying to get out of the market as close to breakeven as possible.

GBP/USD Video 06.12.19

We have broken above the top of a bullish flag, and that is something that most people understand. Because of this, the obvious targets will be the 1.33 level above which was a recent selloff area that started the entire breakdown. Beyond that, the 1.38 level comes into focus based upon the height of the pole of the flag, but that’s obviously going to take some time to get to. We have the UK elections coming, and that of course will cause a bit of volatility but at this point it looks like the conservatives will continue to run Parliament, and perhaps even gain a bit. If they do, it’s very likely that we will get moves on Brexit to finally come to a crescendo, and therefore a little bit of certainty into the market. This is something that the British pound has desperately needed for three years, and now it’s only a matter of time before we start to look at the historical prices, which at this point we are very low.

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