The British pound has initially fallen during the trading session on Thursday but then rallied after the jobless numbers came out in the United States. Quite frankly, the US stock market seems to be rallying at any chance it can, and that tends to work in the favor of some of the riskier currencies such as the British pound. However, the UK has a whole slew of problems out there just waiting to happen so therefore we have to be overly cautious about how we play this market. That being said, I do believe that the 50 day EMA above will cause quite a bit of resistance, and the 1.2350 level is likely to be a difficult barrier to break above.
GBP/USD Video 29.05.20
To the downside, if we were to break down below the 1.21 handle, then this market could go down to the 1.20 level rather quickly. After that, then the British pound goes looking towards the 1.1750 level. There is a significant amount of volatility coming our way, so that being the case it is likely that we will see a lot of back and forth, and quite frankly an explosive move could be coming. In the meantime, I expect to see a lot of choppy behavior, so keep your position size reasonably small. Risk continues to be for sudden whipsaw trading due to the rush of headlines that can come at any moment. Quite frankly, you need to be cautious and protect your trading capital more than anything else at this juncture.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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