The British pound went back and forth during the trading session on Friday, showing signs of significant confusion. We continue to bounce around above the 1.27 level which of course is a bullish sign, but I think that the 1.28 level continues offer resistance. If we can break above the top of the spike from the algo spike during the day, then we could probably go looking towards the 200 day exponential moving average above, pictured in black on the chart.
GBP/USD Video 14.01.19
If we do break down below the 1.27 handle, that could open the door to the 1.25 level underneath, as it has shown itself to be very supportive, and of course it is a large, round, psychologically significant figure. So with this being said, I think that we probably are getting ready to see an explosive move in one direction or the other, but I think both moves are probably somewhat limited as we have a lot of confusion around the Brexit going on right now. That being said, I believe that the most likely scenario is that we continue to see headlines move the markets back and forth. After all, we have a lot of confusion when it comes down to the Brexit, and the lack of clarity from the UK Parliament is in helping the situation. I think that even if we do rally to the upside, the 200 day exponential moving average in the top of the descending triangle will continue to put bearish pressure on this market and it could very well be an excellent shorting opportunity For a bit of a longer-term move.
This article was originally posted on FX Empire
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