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Christopher Lewis

The British pound initially rally during the Monday session to kick off the week but has given up quite a bit of the gains to form a less than attractive candlestick. Ultimately, this is a market that looks as if it is ready to break down and reach lower levels, as the grind lower has been very persistent. Monday was just a microcosm of what we have seen over the last couple of weeks, with the 50 day EMA above offering significant resistance.

GBP/USD Video 30.06.20

If we break down below the candlestick for the trading session on Monday, it is likely that we will then go looking towards the 1.22 handle underneath. At this point, the market then could go looking towards 1.20 level underneath, and at this point in time it may take significant momentum to break down below that level due to the fact that it is such an important level.

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At this point, I do believe that rallies will be sold into, so that is probably the best way to play this market, drilling down to short term charts in fading opportunities to take advantage of when we do get the occasional bounce. I do not know that we are going to see a massive breakdown, I think this is going to be more of a continue grind lower as we worry about the United Kingdom reopening its economy and of course the coronavirus numbers that are so bad in that country.

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

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