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Christopher Lewis

The British pound initially pulled back during the trading session on Wednesday but continues to find support underneath at the 1.2650 level, an area that has been important more than once, and the beginning of a major resistance barrier that extends all the way to the 1.2750 level. Ultimately, I think that it is only a matter of time before we break out to the upside and go looking towards the 1.30 level. This is a market that is clearly starting to get a bit of a boost due to the US dollar getting hammered against almost everything, so I think it is only a matter of time before we do get that breakdown. The 1.30 level of course will attract a lot of attention though, so that is why it is my target.

GBP/USD Video 23.07.20

Even if we break down below the 1.2650 level, we have the 200 day EMA just below offering psychological support and it looks as if the 50 EMA underneath there is starting to actually be followed quite a bit by traders as well. With that in mind, I think you continue to buy dips until we punch through the resistance above and go to the upside. At this point, I think that we are seeing the British pound getting a bit of a benefit from the Federal Reserve loosening monetary policy more than anything else. The British pound itself is not necessarily the strongest currency, but again it is not the US dollar and that is one of the main drivers of it going higher.

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

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