The British pound has gone back and forth during the trading session on Tuesday, as we continue to see a lot of interest around the 50 day EMA. Furthermore, we are dancing around the 1.30 level, so it looks very likely that this level will continue to attract buying pressure. We are sitting at the 50 day EMA, and that suggests that we are going to eventually find enough buying pressure to turn this market to the upside. We are sitting on top of the previous bullish flag, so that of course is an area that should continue to cause support in general.
GBP/USD Video 15.01.20
If we can break above the gap from the Monday session, it’s likely that the market will turn around and go to the upside. At this point, it should send the market quite a bit higher, perhaps reaching towards the 1.35 level given enough time. Having said that though, it doesn’t mean that it will be easy to accomplish, just that it is the longer-term target. Ultimately, I do believe in buying dips as they offer plenty of value, but I also recognize that the biggest component to making money here is going to be using a lot of patience. I would build up positions with very little bits and pieces, understanding that it’s more or less a “core position.” I have no interest in trying to short this pair, at least as long as we can stay above the 1.28 handle. We will continue to have a lot of headline risks, but in the end it does look bullish.
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This article was originally posted on FX Empire
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