The British pound has rallied after the CPI figure in America failed, poking through the uptrend line. However, there is a significant amount of resistance above near the 1.3125 level based upon a very bearish daily candle that kicked off the most recent downtrend. Although I do believe that we eventually break out to the upside, I think what we are waiting on is some type of positive news involving the Brexit. The problem the market has right now is that as soon as he gets it, somebody in the EU side comes out and squashes that news.
Eventually, something has to break, and I do think that eventually we are going to go higher because of nothing else the British pound is historically cheap down at these levels. I believe that the 1.30 level will offer enough support to continue to push this market to the upside. I think longer term we are probably looking at a move towards the 1.40 level, but obviously is going to take a lot of work and perhaps even good news to make that happen. The US dollar falling in general does help, but I don’t think it’s good to be enough in this market to drive the British pound to higher levels.
I would start out with small positions, and then just simply add as you are proven correct. Once we clear the previously mentioned 1.3125 level, then I think you can start becoming much more aggressive in your bullish position, perhaps adding along the way.
GBP/USD Video 14.09.18
This article was originally posted on FX Empire
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