The British pound has gone back and forth during the trading session on Monday to kick off the week, and all things considered that’s actually a good sign. With that in mind, I believe that we may see the reversal that I’ve been waiting on, but I would need to see the markets break the top of the candle stick from the Monday session at the very least, if not break above the 1.28 handle. That will give us a run towards the 1.30 level above, which of course is psychologically and structurally important. After all, we have gotten to the point where there’s really nobody left to sell the British pound.
GBP/USD Video 21.05.19
If we get more of a “risk on” move in the financial markets overall, that would be good for the British pound, as it will send money away from the US dollar. All things being equal, it’s very likely that the markets will continue to trade on a motion more than anything else, as we still have absolutely no idea how the Brexit’s going to turn out, and that of course the US/China trade relations continue to throw global markets into disarray.
If the US dollar strengthens due to treasury buying, that of course works against the British pound as well. However, if treasury markets sell off, that could have people looking for yield and other places, and of course the British pound would be one way that Forex traders would express their opinion. If we break down below the lows of the Friday session, then I think we open up the door to the 1.25 handle.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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