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Christopher Lewis
GBP/CAD

The British pound is going back and forth during the session again on Tuesday as we continue to look at this area with suspicion. Quite frankly, the British pound does not look healthy and it certainly seems as if it is running out of momentum. The 50 day EMA above continues to offer quite a bit of resistance on rallies, and of course the 1.25 level will as well. This is looking a lot more like a double top to me, but it may take some time to kick off. Once we break down below the 1.2250 level, I will be selling this pair and aiming for the 1.20 level at the very least. If we can break down below there, then the market could unwind quite a bit.

GBP/USD Video 13.05.20

Rallies at this point I look at with significant suspicion, and at this point it has become quite obvious that momentum to the upside just is not there. I do believe that eventually we get the breakdown, but I am also the first person to admit just how stubborn the British pound has been. It is not until we clear the 200 day EMA that I will be buying the British pound after seeing the chop and gradual drift lower that has been the case of the last several weeks. The 61.8% Fibonacci retracement level is just above the 1.25 level so that something that will have to be paid attention to as well. Ultimately, I like the idea of shorting this market on rallies, and most certainly on that breakdown.

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