The British pound has pulled back a bit during the week, reaching towards the 1.29 level, where we have seen a little bit of buying pressure. Don’t be wrong, this isn’t something to get excited about, but it does suggest that at least there is some fight left in “Sterling.” The 50 week EMA is underneath, and we are currently dancing around the 38.2% Fibonacci retracement level, an area that a lot of traders will pay attention to. Ultimately, the market has a lot of interest right around the 1.30 level as well, so having said that it’s likely that the market will continue to be choppy, and therefore I think longer-term traders will probably struggle to hang on to the position with any type of comfort.
GBP/USD Video 24.02.20
If we do break above the 1.32 level though, that could open up the door to the 1.35 handle, and then perhaps even breakout above there to go towards the 1.40 level. The market breaking below the red EMA, the 50 week EMA, it could open up the door to a move down to the 61.8% Fibonacci retracement level which coincides with the 1.25 handle. At that point, I would expect buyers to come back into the market as well. After all, the British economy has been relatively resilient, but the biggest problem that this pair has is the fact that it is trading against the US dollar. The US economy is extraordinarily strong, at least when looked at against other currencies. If you are looking to buy the British pound, you probably want to do it against other currencies like the Japanese yen over the Aussie dollar.
This article was originally posted on FX Empire
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