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Christopher Lewis

The British pound went back and forth during the course of the trading session on Friday as the Good Friday holiday and the jobs figure in the United States would have had a massive influence on liquidity and of course the direction of the market. That being said, with so many banks around the world closed I would not read too much into the candlestick. I think at this juncture you need to pay attention to the fact that we are sitting here the 50 day EMA, and of course the fact that we are forming a little bit of a falling wedge. This could be a bullish sign, at least in theory.

GBP/USD Video 05.04.21

The 1.3750 level should in theory offer support, extending as low as 1.35 in that range. Somewhere in that area, I would anticipate a lot of buyers jumping back into the market. However, if we turn around a break above the highs from the Friday session, that could open up the door to the 1.40 level above. That is an area that has been significant resistance more than once, so if we can break above there then I think that the market is very likely to go towards the 1.42 level which is a major resistance barrier on the weekly chart and will continue to be very difficult. At this point in time, market participants will probably have to attract that level multiple times before breaking through. On the other hand, if we were to break down below the 1.35 handle, we would be threatening the 200 day EMA, and the possibility of a much more substantial pullback.

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