The British pound has rallied a bit during the trading session on Thursday to not only fill the gap but did break through it slightly. Having said that, we did pull back a bit in the middle of the day, so at this point it will be interesting to see whether or not we can continue higher. I believe that will be the case, as the gap wasn’t a major gap, and of course the 50 day EMA continues to offer support.
GBP/USD Video 17.01.20
Furthermore, the 1.30 level is a large, round, psychologically significant figure as well as the top of the bullish flag that previously had sent the market towards the 1.35 handle. That bullish flag measures for a move towards the 1.38 handle, and of course we have not hit that level yet. That being said, I believe that longer-term traders will still be looking towards the level as a target. That doesn’t mean that it’s going to be easy, and clearly, we have a lot of volatility ahead of us. However, the British pound has stabilized a bit over the last several weeks, as we continue to grind back and forth and try to decide where we go next. I don’t have any interest in shorting this pair, at least not at this point in time mainly because I recognize that the bullish flag extends all the way down to the 1.28 level as far as the body of it is concerned, so there should be a lot of order flow in that general vicinity.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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