Christopher Lewis
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GBP/USD daily chart, April 02, 2019

The British pound rallied significantly during the trading session on Monday, testing the highs from the Friday candle rather early during the day as we continue to see a lot of consolidation in a market that of course has been very noisy. After all, we still have plenty of headlines out there when it comes to the Brexit, which continue to be very difficult to follow.

GBP/USD Video 02.04.19

All that being said, it looks as if the 1.30 level is a crucial support level, and the recent action has certainly panned out that way. The 61.8% Fibonacci retracement level since there, and of course we have seen a couple of bounces. However, to the upside we see a lot of resistance at the 1.3350 level, which of course being broken to the upside could open the doors to the 1.35 handle rather quickly, perhaps even changing the overall trend even further than we have seen as of late. Remember, we broke above a major downtrend line, bounced off of it, and have been consolidating since that move.

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With all that being said, I think that the British pound is in the process of finding its legs for a longer-term move to the upside. These are always messy and noisy affairs, and difficult to trade. Because of this, it will take a certain amount of patience and a whole lot of belief. If we do break down below the 1.30 level, then the market will probably look to “reset” down at the 1.28 level underneath.

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