With the markets waiting for the Federal Reserve to make some type of statement, it makes a lot of sense that the markets are trying to cover positions ahead of time. With the idea of the Federal Reserve becoming much more dovish, it makes sense that the US dollar we give back some of the gains. However, we also have the Brexit going on so this is probably somewhat short-lived. The question now is whether or not we can break above the massive resistance near the 1.2750 level. That is an area that should be massive resistance.
GBP/USD Video 20.06.19
To the downside, the 1.25 level has offered significant support, something that you would anticipate. After all, it is a large, round, psychologically significant figure and an area that has offered support in the past. Nonetheless, if we were to break down below that level, this is a market that should continue to go towards the 1.2250 level. In the short term, I believe that we continue to go higher but the volatility will certainly throw this market around rather relentlessly, and there will be much more clarity towards the end of the week as large money will have placed all of their bets as to the future direction.
One of the main reasons I think this market can’t rally quite as much as others might against the US dollar is that we still have the Brexit and all of that noise going on. Because of this, it will probably lag other currency pairs if we do start to see nasty selling of the greenback.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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