The British pound has pulled back slightly during the trading session on Wednesday, reaching down to try and find the support underneath that has formed the better part of a flag. This is the market that has rallied significantly and now is trying to digest this massive gains. All things being equal though, it looks as if the market is ready to take off sooner or later, and really at this point all we need is some type of good news coming out of the Brexit situation. At this point, it should also be noted that the 200 day EMA underneath should offer plenty of support, so I think there are a whole host of reasons to think that this market should break to the upside.
GBP/USD Video 14.11.19
Furthermore, the 50 day EMA is starting to reach higher, trying to take out the 200 day EMA. If we can break above there, then it becomes a “golden cross” which is a very bullish sign. Ultimately, this is a market that continues to see a lot of money flowing into it and if we do get that golden cross signal, it’s likely that the market will be more of a “buy-and-hold” scenario. At this point, based upon the flag that is being formed, the British pound could go looking towards the 1.38 level above. Ultimately, market participants will continue to look towards the upside in general, as Brexit drags on. If we ever get some type of resolution, it’s likely that we will eventually take off for a huge move as we are at historic lows.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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