The British pound rallied a bit during the trading session on Monday to kick off the week, reaching towards the 1.3133 handle, an area that has been resistance over the last several sessions. We have made “lower highs” in this market, but when we look at the longer-term chart, there is a definitive range that is clearly shown.
GBP/USD Video 16.04.19
The 1.30 level continues to be a major supportive level, just as the 1.3350 level above is massive resistance. At this point in time there’s no reason to think that were going to break this range, but the fact that we are making “lower highs” does suggest that if we are going to break out, it’s probably to the downside that’s more likely. If that happens, it’s very likely that we will go down to the 100% Fibonacci retracement level, essentially the 1.28 handle, to find more buyers in that region.
If we were to somehow break above the 1.3350 level then the most likely scenario would be reaching towards the 1.35 handle, as it is a large, round, psychologically significant figure. If we were to break above that, it’s very likely that we will continue to go much higher from a longer-term standpoint. It’s probably not going to happen until we get some type of headline involving the Brexit that’s positive, and quite frankly right now the market continues to be very volatile because there are no clear signs as to where the Brexit is going.
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This article was originally posted on FX Empire
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