The British pound rallied a bit during the trading session on Wednesday, peeking above the 1.25 handle before pulling back a bit. The market is certainly winding itself up for more momentum going forward, so I think at this point we are about to see a significant move. The Federal Reserve will have a lot to say about this as well, so it’s interesting that the market is trying to rally due to the Federal Reserve looking to cut interest rates, but at the same time can’t hang onto those gains which tells me just how difficult it is to get bullish of this market.
GBP/USD Video 25.07.19
Looking at this chart, it looks very likely that we are going to see a drop given enough time but we can also take a look at this consolidation as a potential triangle forming. There does seem to be a significant bout of resistance all the way to the 1.26 level, so it’s not until we break above there that I could change my overall attitude. I suspect that it’s unlikely to do that, because we are starting to see the 50 day EMA reach down towards that level as well. To the downside, if we can break the 1.24 handle, then I think we could go to the 1.2250 level underneath and then possibly even the 1.20 level after that. All things being equal, this is a market that you should continue to look at in the prism of what the US dollar is doing.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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