The British pound went back and forth again during the trading session on Friday as we continue to dance around the 50 day EMA. The 1.23 level also is attracting a certain amount of attention as well as the 50% Fibonacci retracement level. At this point, the market looks very noisy and stuffy. At this point, the British pound is still difficult to trade mainly because of the Brexit, and the massive amount of headlines that seemed to never end. The Brexit scenario doesn’t seem to be getting any better, and likely will continue to be a situation that continues to throw the British pound lower longer, but at the same time it can be said that every time there is hands of hope, algorithmic systems kick in and start buying the pound. In other words, you will need to be very cautious about position size.
GBP/USD Video 07.10.19
To the upside, I see the 1.25 level as massive resistance, and breaking above that area could be the first sign that the trend has changed. Remember, markets try to anticipate what’s going to happen next, not necessarily react to what has already happened. To the other side of the equation, if we were to break down below the 1.22 handle, the market more than likely will go looking towards 1.20 level underneath there. The 200 day EMA is above the most recent high, and therefore it’s very likely that we continue to see downward pressure from a longer-term traders, at least until we get this mess between the UK and the EU sorted out.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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