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Christopher Lewis
GBP/USD daily chart, October 15, 2019

The British pound fell during most of the trading session on Monday as traders ponder the idea of breaking above the 200 day EMA. Regardless of what you believe about the Brexit situation, it’s relatively obvious that the market has got ahead of itself in the last couple of days. While there will continue to be a lot of noisy trading in this general vicinity, a break down below the 1.25 level could open up the door to a recapturing of the 50 day EMA by the sellers. The 200 day EMA of course is a longer-term signal as to trend, so that will be paid close attention to as well.

GBP/USD Video 15.10.19

To the upside, the 1.28 level will offer a significant amount of resistance that will be difficult to overcome, and as a result a break above there would have to be paid attention to for a potential longer-term move. If we did break above there, then the market is almost certainly going to go looking towards the 1.30 level. It will almost need some type of good news to make that happen though, because quite frankly we have gone so far in such a short amount of time is difficult to imagine a scenario where traders have that much more juice to push the market to the upside. At the very least, a pullback is needed over the next couple of days as markets can’t go in one direction forever.

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