The British pound has initially tried to rally during the trading session on Friday but then gave back the gains rather early. When you look at the chart, you can see that we have been consolidating just below the 1.42 handle, trying to break out to the upside and take off even higher. We need to make a fresh high from the top of the last weekly candlestick in order to take off, and when we do it is very likely that we could go looking towards the 1.45 handle above, which is a large, round, psychologically significant figure and an area that a lot of people will be paying attention to due to the previous action.
GBP/USD Video 14.06.21
On the other hand, if we turn around a break down below the 50 day EMA, it is likely that the market will go looking towards 1.40 handle. The 1.40 handle of course is a large, round, psychologically significant figure that has attracted a lot of attention recently, as it was previous resistance during consolidation. “Market memory” should dictate that the area will offer a certain amount of support.
All things being equal, the market should continue to see a lot of noisy behavior, and as we are trading in the summertime it is likely that we will see a lack of volatility in general. That being said, the market is likely to continue to see Bobby behavior but at the end of the day I think what we are looking at is the market trying to build up enough momentum to finally make the breakout. That could take a while.
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