The British pound gapped higher to kick off the week during the session on Monday, but then pulled back to fill that gap before taking off again. That’s a very strong sign, so it’s very likely that we will continue to try to go higher. I think there is a lot of noise just above though, especially near the 1.2975 area that extends to the 1.30 level. That being said, I would expect a lot of noise in this pair which you should see during the Brexit negotiation, which of course continues to drone on and on.
GBP/USD Video 19.02.19
However, I think there is plenty of support underneath, especially near the 1.28 handle which of course is the 50% Fibonacci retracement level and of course the area that coincides nicely with the previous downtrend line. With that being the case, I do expect see a lot of buying pressure underneath and I do think it’s only a matter time before the British pound attract more attention. This not to say that it’s good to be easy, but I do think that we eventually grind higher.
Even if we did break down below the 1.28 handle significantly, I believe that the 1.27 level is even more supportive, and should continue to attract a lot of attention as well. After all, that’s an area that has been important more than once that it is the 61.8% Fibonacci retracement level also. This should continue to function as a “floor” in the market. I believe in buying dips when it comes to Cable.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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