Christopher Lewis
Add to Bookmarks

The British pound rallied a bit during the course of the trading session on Thursday but then turned around as the Bank of England came out with an extremely accommodative policy stands. While this was not necessarily a surprise, the reality is that the market has quite a bit of noise surrounding it based upon the Federal Reserve as well. With that in mind, I believe that the 1.37 level underneath is going to be support, while the 1.42 level above offers resistance. That makes the 1.40 level essentially “fair value”, which of course is a large, round, psychologically significant figure that a lot of people will be paying attention to. Beyond that, we also have the 50 day EMA hanging around the same area.

GBP/USD Video 25.06.21

When I look at this chart, I anticipate that we are probably going to continue in a relatively well defined range, and it is also possible that the rest of the summer looks at these levels as the boundaries for the market in general. That being said, the market is likely to continue seeing a lot of support underneath at the 1.37 level, not only due to the fact that it has been supportive, but we also have the 200 day EMA racing towards that level. When you look at the 1.42 level, you can see from a historical standpoint it has been important for quite some time, and it does make sense that we would have to struggle greatly to get above there. At this point, I think it is a lot of back-and-forth trading just waiting to happen over the next couple of months.

Know where GBP/USD is headed? Take advantage now with 

Trading Derivatives carries a high level of risk to your capital and you should only trade with money you can afford to lose. Trading Derivatives may not be suitable for all investors, so please ensure that you fully understand the risks involved, and seek independent advice if necessary. A Product Disclosure Statement (PDS) can be obtained either from this website or on request from our offices and should be considered before entering into a transaction with us. Raw Spread accounts offer spreads from 0.0 pips with a commission charge of USD $3.50 per 100k traded. Standard account offer spreads from 1 pips with no additional commission charges. Spreads on CFD indices start at 0.4 points. The information on this site is not directed at residents in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

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

Don't miss a thing!
Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Trade With A Regulated Broker