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Christopher Lewis

The British pound has rallied significantly during the trading session on Wednesday to reach towards the 1.3150 level, an area that made the market pull back. At this point though, we have now seen a couple of hammers after that pullback so to me it suggests that the buying is relentless, and it is only a matter of time before we break out. Once we do, this market is very likely to go looking towards the 1.35 handle over the longer term. This makes quite a bit of sense, due to the fact that the US dollar continues to lose strength due to massive monetary policy coming out of both Washington DC and the Federal Reserve itself. With this, I believe that the markets will break out sooner rather than later.

GBP/USD Video 06.08.20

In the short term, the 1.30 level has offered massive support, and I think that continues to be the short-term floor in the market. If we were to break down below there then I think we go looking towards 1.2750 level, an area that offers a 100 PIP range of support. It is not until we break down below the 1.2650 level that I would consider shorting this pair, and quite frankly I think the rest of the world feels the same way. This is about the US dollar and not the United Kingdom, so nobody cares about Brexit at the moment and everybody cares about the Federal Reserve. With that being the case, the British pound will continue to strengthen, despite the fact that the United Kingdom has a whole host of issues.

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

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