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GBP/USD Price Forecast – British Pound Gives Back Gains

The British pound broke above the highs of the previous session on Thursday, but then turned around to show signs of weakness. At this point, the market is likely to grind back and forth but I think the most important thing to pay attention to is that we have a lot of support underneath.
Christopher Lewis
GBP/USD Price Forecast - British Pound Gives Back Gains
Pound currency background

The British pound has pulled back a bit during the trading session on Friday to in the week, showing signs of weakness but at this point it should also be noted that there is a lot of support underneath. The uptrend line should continue to be a major influence, and then of course we have the 50 day EMA underneath that should continue to offer support. Furthermore, the 1.30 level underneath is psychologically important as well. With all these things matching up the same time, I would love to see a pullback that I can take advantage of. If we get down there, I will not hesitate to start buying because it is a perfect place to put a trade on. If we were to break down below the 1.2950 level, then it’s likely that we could go down towards the 200 day EMA. To the upside, if we did break above the highs during the session on Friday, the market is free to continue its grind higher.

GBP/USD  Video 27.01.20

Keep in mind that the British pound has a lot of noise attached to the Brexit negotiations, but we do finally have the end in sight. Ultimately, this is a market that also has seen better than anticipated PMI figures during the session, so that does help the case for the British pound and British economy as well. Regardless though, I think that if you add slowly, you can continue to build a core position.

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