The British pound has gone back and forth during the week, testing both directions quite stringently. On the daily chart, there are hammers and shooting stars in this neighborhood, so it does look very likely that the market participants will continue to go back and forth and try to figure out where to go next. At this point, it looks likely that we will eventually break out, and at this point I would suggest that it’s probably easier to fall from here, at this point the market is likely to go looking towards the 1.20 level more than anything else, but if we did break out to the upside the market would more than likely test the 1.25 handle.
GBP/USD Video 07.10.19
All things being equal, this market will be driven by news headlines and could be quite suddenly. Because of that you need to keep your position size relatively small in this market, but obviously there are more things that can go wrong than right at this point. With that in mind I feel much more comfortable shorting this market but recognize that the tide could turn with some type of Brexit deal. The European Union has recently dialed back some of its rhetoric and tough stance, so we could be making headway eventually, but at this point the market still looks as if it is simply teetering on news driven events. With that, it’s difficult to put any real faith into the market for a longer-term move right now.
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This article was originally posted on FX Empire
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