The British pound has initially pulled back during the trading session on Tuesday but found buyers underneath the turn things around and show signs of strengthening. By doing so, the market looks very likely to continue reaching towards the 1.30 level over the next several sessions. I do not necessarily think that we get there overnight, but clearly that is the intent at the moment.
GBP/USD Video 29.07.20
I see a significant amount of support underneath at the 1.2750 level, extending down to the 1.2650 level. Think of it as a “zone of support” that the market is currently banking on. As long as we stay above the 1.2650 level, it is very likely that we continue to see the British pound stay in a strong uptrend. For those of you who follow this signal, the “golden cross” is about to happen as well, so that of course will attract a certain amount of trading to the upside.
All things being equal, this is about the Federal Reserve and not much else. The Federal Reserve is doing everything it can to devalue the US dollar, and it looks like it might be winning that battle. The 1.30 level makes it nice and tidy little target that a lot of traders will be more than happy to take profits at, so that is why I think it offers a bit of resistance. I do not think that resistance last very long, but I do think that it is there, and it is something that you should pay attention to once we approach that level.
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This article was originally posted on FX Empire
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