The British pound pulled back a bit during the trading session on Friday, reaching towards the 1.25 handle. This is obviously a large figure, and will attract a certain amount of attention. The fact that we shot straight through the roof on Thursday is a very bullish sign and the fact that we pulled back towards the 1.25 level and found buyers also is a bullish sign. However, this is the British pound and the Brexit is still attached to it. While the UK parliament has voted to take the idea of a “no deal Brexit” off the table, the reality is that they don’t make that decision without the European Union.
GBP/USD Video 22.07.19
The 1.2575 region is massive resistance, so I don’t look to buy the British pound in this area. Beyond that, we also have the 1.2750 level above offering resistance, so I think it’s only a matter time before we start selling again. That being said, there are a couple of different ways that I am looking to play this market.
If we close below the 1.25 handle, then it’s likely that we go much lower. At that point I would be a seller. If we rally and show signs of exhaustion near either the 50 day EMA which is pictured in red, or the 1.2750 level, I’d be a seller there as well. Quite frankly, I would not be a buyer until we clear that 1.2750 level.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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