The British pound has gone back and forth during the trading session on Friday, running into a bit of resistance at the 1.2250 level, and that area is an area where I had anticipated seen a bit of resistance based upon an inverted hammer previously. This is normally a sign that there is a lot of trading in the area, and the fact that the market had accelerated to the upside so quickly made me believe that it was difficult to simply slice through it without any issues.
GBP/USD Video 30.03.20
At this point, if we can break above the highs of the trading session on Friday, we probably have a better shot at going towards the 1.25 handle. More likely than not though, I believe that we will probably pull back a bit, even if we do ultimately change to a longer-term uptrend. Looking at the chart, I believe that the 1.20 level will be an area that could cause a bit of interest. This is an area that should be supportive, and therefore it will be interesting to see how this plays out. I do think that the British pound is a bit overdone in the short term, but if we are trying to completely turn the trend around longer-term, we quite often need to reach towards the bottom again to make sure that it holds. If we get a “higher low” on that pull back, then it’s possible that the pair can continue to grind to the upside. Either way, it’s got a little too far in too short of a timeframe.
This article was originally posted on FX Empire
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