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Christopher Lewis
GBP/USD daily chart, September 19, 2019

The British pound has juggled around the 1.25 level, as we are sitting at what one would have to think is a crucial level. There has been a lot of trading in this area, and the market is a bit parabolic. So the question now is whether or not the market is going to grind sideways and kill off a bit of time, or rollover based upon the resistance in the 38.2% Fibonacci retracement level. We are halfway between the 50 day and the 200 day EMA indicators, so that might be something worth paying attention to as well.

GBP/USD Video 19.09.19

There is a lot of resistance extending to the 1.2750 level as there is a lot of noise between here and there, so all things being equal it’s very likely that the market will eventually find quite a bit of resistance between here and there. Beyond that, there’s also the possibility of some negative headlines coming out of the entire Brexit situation that could turn the thing right back over. The 200 day EMA is close to the 50% Fibonacci retracement level, and therefore it’s very likely that it will cause a certain amount of noise as well. Longer-term, it’s very likely that we still have “one more flush lower” in the British pound, as we have not had a solution to the British leaving the European Union. However, if we do close above the 200 day EMA for a couple of days, then the trend has probably changed. It’s very difficult to imagine that the market has bottomed the way it has and everything is awesome again when it comes to the UK.

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