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Christopher Lewis
GBP/USD daily chart, June 13, 2019

The British pound try to rally during the trading session on Wednesday but ran into a buzz saw of resistance near the 1.2750 level. By rolling over at that area that we ended up forming a bit of a bearish looking candle, at least at midday. A pullback from here makes a lot of sense, but quite frankly it also looks as if the British pound is searching for a floor. This makes sense if you think about it, because the Federal Reserve has walked back its monetary tightening policy, and at this point it’s very likely that we will see US dollar weakness start to become a major factor.

GBP/USD Video 13.06.19

On the other side of the Atlantic though, there of course is the Brexit mass. That isn’t changing anytime soon so quite frankly if you’re looking to short the US dollar against another currency, the British pound is probably going to be a laggard. However, I do think that the 1.25 level is going to offer a bit of a “floor” before a final flush. I do believe that we are closer to the bottom of the market than the top, so I still prefer buying dips.

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Alternately, if we break above the 1.28 level, then I think the British pound will go looking towards the 1.30 level above which should be significantly resistive. The 50 day EMA is between here and there, so that could cause some issues, just as the 200 day EMA is a right below the 1.30 handle currently.

Please let us know what you think in the comments below

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