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Christopher Lewis
GBP/USD daily chart, August 15, 2019

The British pound initially rallied during the trading session on Wednesday, but then broke down from the 1.21 handle the show signs of weakness again. The fact that we have done that suggests that we are going to continue to fall every time we rally, and perhaps try to build up enough momentum to break down below the 1.20 level. This of course is a large, round, psychologically significant figure, and an area that has caused quite a bit of noise in the past. If we break down below there, it’s a big deal and I think we could drop towards the 1.15 level underneath.

GBP/USD Video 15.08.19

Above here we have a 100 PIP consolidation area that extends to the 1.22 level, so obviously it’s going to be difficult to go long at this point. Beyond that we also have the Brexit which of course continues to cause major issues, as there are much in the way of details that give us any sense of clarity at this point. With that in mind, I fade rallies and I continue to aim for lower levels. Once we break below the 1.20 level I think that we will see a flood of fresh new money coming into the market, running toward the relative safety of the US dollar as treasuries are becoming one of the favorite assets around the world. I have no scenario in which a willing to buy the British pound at this point, at least not until we know how the Brexit turns out.

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