The British pound has rallied a bit during the trading session on Thursday, reaching towards the 1.30 level. This of course is a large, round, psychologically significant figure, and if we can break above there it’s likely that we go much higher. This would be a simple continuation of the overall bullish pressure that we have seen, and I do think that it is only a matter of time before we do try to reach towards 1.3250 level, and then eventually the 1.35 handle. Remember, much of the selloff was the “sell the news” reaction that we got after the election. At this point, the market is likely to see a lot of volatility still, as there are now concerns about whether or not Boris will leave the European Union without an agreement.
GBP/USD Video 27.12.19
Ultimately though, things will sort themselves out and the British pound is cheaper from historical standpoint. On a daily close above the 1.30 level I will be a buyer again, and I believe that there is a significant amount of support all the way down to the 1.28 handle. If the market were to break down below there it’s likely that it were to fall down to the 1.25 handle, perhaps even lower than that. All things being equal though I do like the idea of going long of this market and continue to go towards the 1.35 handle, and I do think that given enough time we will break through there and go even higher.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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