The British pound has initially tried to rally during the trading session on Monday but gave back gains as the 200 day EMA seems to be offering a significant barrier. Because of this, it looks as if the market is probably going to try to reach back towards the 1.35 handle, an area that I do think would offer a significant amount of support. Ultimately, this is a market that will continue to be very noisy but at the end of the day very interesting. After all, we are in an area that we are squeezing between the 200 day EMA and the 50 day EMA, typically meaning that we are about to see a fairly big move.
GBP/USD Video 11.01.22
Keep in mind that the US dollar has strengthened against most currencies and therefore it should not be a huge surprise to see it do so against the pound if we do rollover. However, the British pound has been a bit of an outlier when it comes to G 10 currency is, so it will be interesting to see whether or not it can keep that up. If it does, then a break above the highs of the Monday session could open up the door to the 1.37 handle. That is an area where we have seen a lot of noise in the past, so it would not overly shock me to see this market make that move. However, to the downside if we squeeze below the 50 day EMA, this could have been the latest peak in what has been a large down trending channel.
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