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Christopher Lewis
GBP/USD

The British pound has gone back and forth during the trading session on Wednesday as we are continuing the slow upward grind overall. Having said that, we still need to worry about overall risk sentiment, especially with all things Brexit related. Looking at the chart, you can see that the 1.35 level above looms large as resistance, but it can also be thought of as an eventual target. The way that the market has behaved does suggest that dips going forward will probably be buying opportunities, as it seems like the market has all but priced in certainty that a deal eventually gets done between the United Kingdom and the European Union.

GBP/USD Video 26.11.20

Having said that, it is not as if there cannot occasionally be disappointment that sends the market back down. In fact, I would look at those times as buying opportunities and not necessarily a reason to sell the market. Because of this, I believe that we are looking at a scenario where we are simply just a bit overextended. Unless we get some type of good news between now and the end of the week, it is likely that we do get that pullback. After all, it seems as if the market was pricing in a Brexit deal sometime this week from everything that I have been seeing and hearing.

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That may have been a bit too optimistic, but we will eventually see some type of resolution and when we do clarity will become much easier to obtain. After all, the British pound is historically cheap so one would have to think that people are chopping at the bit to buy the Pound longer term.

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

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