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Christopher Lewis

The British pound has pulled back just a bit during the trading session on Wednesday, only to turn around and show signs of strength again. That being said, there is a lot of noise just above, so you should pay attention to the area between here and 1.25, as it could be rather resistive. While it looks very positive, the reality is that you can’t necessarily go long until you clear that barrier. Not only is 1.25 going to be psychologically resistive, but it is also the scene of the 61.8% Fibonacci retracement level. In other words, there will be a lot of technical interest in this pair at that area.

GBP/USD Video 09.04.20

To the downside, it certainly looks as if there are still buyers and at this point, we could be forming a bullish flag. The bullish flag measures for roughly 1000 pips, which looks almost identical to the GBP/JPY pair. If that’s going to be the case, then the British pound may be one of the better performers over the next couple of weeks. If that’s going to be the case, then you obviously wish to be long of the British pound in general, even though the so-called “death cross” just form, but quite frankly that’s a nonsensical indicator as it tends to happen either after the move or so far into the move that it is essentially irrelevant. Because of this, I believe that we could see an explosive move to the upside. To the downside, it looks as if the 1.22 level will continue to offer massive support.

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