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Christopher Lewis

The British pound has gone back and forth during trading on Tuesday, as we are trading just below the 50 day EMA. At this point in time, the market is likely to continue to see a lot of noise, and therefore it makes sense that this noise could lead into choppier and perhaps even negative action. After all, the British pound has to deal with the British economy which of course looks horrible. Furthermore, the market is likely to factor in a lot of negativity from a global perspective. This typically means that the market is looking towards the US dollar, and perhaps even treasury markets.

GBP/USD Video 06.05.20

To the downside, the market is likely to go down to the 1.23 level, perhaps even down to the 1.22 level. To the upside, the 1.2650 level seems to be the absolute “ceiling” for the market, so therefore it is not a huge surprise if we rally towards that level and fail again. The 200 day EMA sits just above there as well, so it is worth paying attention to. With that being said, I like the idea of fading signs of exhaustion, and therefore will continue to look to short-term charts in order to take advantage of signs of rolling over. If we break down below the low of the Monday session, then it is likely that we will continue to drop towards those areas underneath that I mentioned previously. All things being equal, this is a market that looks as if it is going to struggle just above current trading levels.

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