The British pound has found a bit of support on Friday, but quite frankly this is an area that the traders out there will be paying attention to. If we break down below the 1.2950 level, then the market could very well reach towards the 1.28 level underneath. That is essentially the 100% Fibonacci retracement level, so it would make sense that most traders will be looking for that move. That could be a short-term selling opportunity, and you should keep in mind that the highs continue to get lower, so it does suggest that we are struggling with.
GBP/USD Video 22.04.19
This isn’t to say we can’t rally, but it’s not until we break above the 1.3133 level that I would be interested in buying. I think that what we are seeing more than anything else is a simple drift lower as we have no interest in owning British pound because there is no catalyst to do so. Quite frankly we got the extension of the Brexit for six months, and therefore we probably will be waiting for some type of announcement to decide what to do next. I suspect that we will probably drop, looking for more support at a lower level. I would be a buyer of value closer to the 100% Fibonacci retracement level, but if we did break out to the upside it’s very likely that we could go to the 1.3350 level.
At this point though, it looks as if the US dollar is starting to show signs of strengthening against the lot of other currencies and with no reason to suspect that the British pound is going to get good news about the Brexit anytime soon, it’s very likely that there will be a simple lack of interest here more than anything else.
Please let us know what you think in the comments below
This article was originally posted on FX Empire
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