The British pound has pulled back a bit during the trading session on Friday, reaching back from the 1.3150 level. To the downside, the market is looking for the 1.30 level to be supported, so do not be surprised at all to see it bounce from that level. That is an area that has been important more than once so if we were to break down below there it could open up fresh selling. However, I would not be a seller at that point due to the fact that the 1.2750 level is the beginning of significant support that extends down to at least the 100 pips.
GBP/USD Video 10.08.20
To the upside, if we break above the highs from the session on Thursday, the market is likely to go much higher, perhaps reaching towards the 1.35 level which is my longer-term target. The British pound continues to be very volatile, but obviously very bullish. At this point in time it is a matter of buying short-term dips and taking advantage of US dollar weakness. I do not see how this changes anytime soon, due to the fact that the Federal Reserve is flooding the market with greenbacks. Ultimately, I do think that we break out and we go much higher, but we have gotten a bit ahead of ourselves recently, so a bit of a breather would make quite a bit of sense as well. Ultimately, this is a market that will continue to see extraordinarily bullish pressure, but that cannot be every day.
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This article was originally posted on FX Empire
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