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Christopher Lewis
GBP/USD daily chart, September 30, 2019

The British pound continues to be very choppy, dropping down below the 1.23 level in the early hours on Friday, only to turn around again and show signs of support. At this point, it looks as if the 1.23 level is going to offer a bit of minor support, as it was minor resistance previously. A bounce from here would make some sense, but at the end of the day there are still a lot of unknowns surrounding the British pound, so it’s hard to imagine a scenario where it’s easy to own this currency for any length of time, especially against the greenback of all currencies as it is considered to be a much more “safe” currency to own. With all of that, it’s likely that fading the rally should work given enough time.

GBP/USD Video 30.09.19

The alternate scenario of course is that we simply slice through the bottom of the candle stick for the Friday session, which opens up more selling pressure and an attempt to get back down to the 1.20 level, which is my longer-term target. In fact, I’m probably going to ignore any buying signals that I have in this pair until we get well above the 1.25 handle or more specifically even the 200 day EMA which is currently trading at 1.2625 above. While the bounce has been rather impressive, it’s only been to the 38.2% Fibonacci retracement level recently, not exactly confidence inspiring.

Please let us know what you think in the comments below

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