The British pound went back and forth during the week, breaking higher, but it could not break above the top of the shooting star from the previous week. We then broke down a bit but found plenty of support at the 1.30 level. Ultimately, the market is still hanging around the same area, so it looks to me as if the market is trying to build up enough momentum to finally break out to the upside. That being said, this is a market that could very well find quite a bit of support based upon the previous bullish flag that is so prominent on this chart.
GBP/USD Video 13.01.20
Furthermore, if we were to break above the shooting star from the previous week, that would be a very bullish sign, as it would not only show upward momentum again, but would also break the top of a shooting star which is almost always a bullish sign as it shows a lot of sellers getting trapped. Ultimately, 1.35 will be the prize but if we can break above there this market could really start to take off. The British pound of course will be very noisy, but as the Brexit is negotiated, it should continue to stabilize the British pound going forward and habit rally based upon the fact that it is historically cheap. If we were to break down below the 1.28 handle though, that could change a lot of things as it would be a significant loss of confidence when it comes to the British pound. All things being equal, I am bullish, but I recognize that it takes some time to turn things around.
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This article was originally posted on FX Empire
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