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Christopher Lewis
GBP/USD daily chart, October 31, 2019

The British pound has rallied a bit during the trading session on Wednesday, as we await the FOMC statement. Regardless though, when you look at the technical analysis it looks as if we are forming a bit of a pennant or bullish flag. If the market continues to go higher and breaks out above the top of the flag, in theory the market could be looking towards the 1.37 level above. Having said that, there are a lot of technical factors in the near term that will come into play.

GBP/USD Video 31.10.19

The 200 day EMA underneath is massive support, which trend traders tend to follow quite a bit. It is at the 1.27 level, and then the 1.25 level based upon structure underneath. With that being the case is very likely that the market will find buyers on dips and I think this is probably going to be the continued play as Brexit has been extended by yet another 90 days. This at least takes the immediacy of a “no deal Brexit” off the table. That being said, it does bring a little bit of calming into the market.

The 1.30 level above is significant resistance, so if it gets broken to the upside the market should continue to go much higher. The 1.33 level above should be a significant resistance. The short term though, so it looks very choppy and difficult. At this point in time it will continue to be difficult but it’s obvious that there is a lot of buying pressure underneath based upon the recent shot higher.

Please let us know what you think in the comments below

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