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Christopher Lewis
GBP/USD daily chart, July 23, 2018

The British pound rallied significantly during the trading session on Friday, slamming into the supply area at 1.3075. There is a massive barrier between there and the 1.31 handle, so although I don’t think it will be impossible to break above there, I also recognize that we may have gotten a bit overextended in far too short of a time. At this point, I anticipate a pullback and then perhaps another rally. However, if we were to break above the 1.3120 level, then I think the market could go to the 1.3150 level, followed very quickly by the 1.32 level.

I believe that the 1.30 level underneath has shown itself to be rather impressive and supportive, and I believe that the US dollar is overextended at this point. That’s not just against the British pound, but against other currencies around the world in general. I see a coordination between the EUR/USD, AUD/USD, and GBP/USD pairs. Quite frankly, I think that this market is one that will benefit from US dollar weakness overall, not necessarily British pound strength. I believe that the next couple of days will probably be US dollar negative, but of course headlines can change that at the blink of an eye.

GBP/USD Video 23.07.18

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