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Christopher Lewis
GBP/USD

The British pound is rallying to kick off the week on Monday, but as you can see has run into a certain amount of resistance near the 1.2550 level, but ultimately this is a market that I think is simply grinding back and forth in a manner to kill time. After all, the markets do not seem to be trying to figure out the bigger move, but one thing that you can take a look at is the fact that we have formed “higher lows”, so that does help the idea of an uptrend, so at this point I think we may be reluctantly trying to push to the upside. The 200 day EMA will cause massive resistance though, so I think it is somewhat limited in the short term.

GBP/USD Video 07.07.20

Breaking down below the lows of the previous couple of days could open up a move back towards the 1.2250 level, an area that has been mentioned several times as support and resistance over the longer run. A move below that level could open up the door to the 1.20 level but it seems very unlikely that it is going to happen easily. The currency markets are grinding back and forth because quite frankly I think a lot of people do not know what to do. With this, we probably continue to see you back and forth short-term trading more than anything else but need to be cognizant of where the 50 day EMA and the 200 day EMA both sit.

For a look at all of today’s economic events, check out our economic calendar.

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