The British pound has initially fallen during the trading session on Wednesday but has also found enough support underneath at the 1.28 region to bounce yet again. This continues the overall consolidation that we have seen, as we try to build a bullish flag for the next move. The bullish flag has a top at the 1.30 level, so if we were to break above there, it’s very likely that the market continues to go much higher, reaching towards the 1.33 level next, as it is the next major resistance barrier based upon structure. Beyond that, based upon the pole of the flag, we could be looking at a move all the way to the 1.38 handle above.
GBP/USD Video 28.11.19
The 50 day EMA has crossed over the 200 day EMA recently, and it does in fact look as if we are building a case for a longer-term “buy-and-hold” type of scenario. I don’t believe that the British pound will fall much further, but if it were to break through all of this area then we are perhaps looking at the 1.25 level underneath as support. At that point in time, then the entire uptrend could be threatened if we were to break down further. All things being equal though, it does look as if it’s going to come down to the UK election, as a Tory majority in parliament would almost certainly bring the odds of Boris Johnson getting his Brexit into focus. At this point, buying on the dips continues to work.
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This article was originally posted on FX Empire
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