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Christopher Lewis
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GBP/USD

The British pound has had a very volatile week, initially dipping quite a bit but then recovered to reach towards the 1.42 level yet again. This is an area that I think continues to see a lot of selling pressure, due to the fact that it has been important more than once. Looking at the candlestick for the week, it does suggest that we are trying to build up enough pressure to break out, but if we were to break down below the bottom of the candlestick, then it would essentially make it a “hanging man.”

GBP/USD Video 07.05.21

At this juncture, I do believe that eventually we will go looking towards 1.45 handle, but it is clear that we just do not have the momentum to do so quite yet, so we are either going to grind sideways in the short term, or perhaps even pull back in order to find a bit of value. If we can break above the weekly candlestick that we are printing now, then it is possible that we have an opportunity to grind towards that 1.45 level.

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That being said, I do not think that it is going to be easy, so I expect more headaches for traders who are bullish. As far as being bearish is concerned, that is a great way to lose money although we may get a short-term pullback that might offer a little bit of profit. Regardless, biting the trend is a great way to lose money overall so I generally do not do that, especially when looking to work with the weekly charts. As far as selling is concerned, we would need to break down below the 1.37 level, something that looks very unlikely anytime soon.

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

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