The British pound has rallied significantly during the trading session on Monday to reach towards the 1.37 level, which is where the 200 day EMA currently sits. Whether or not we can break above there is a completely different question, and of course the 1.3750 level has been an area of selling pressure previously. If we can wipe out that candlestick, then it is possible we could go looking towards the 50 day EMA, but I do think that it is only a matter of time before we start selling off in the pair, especially if we start to get a little bit of a “risk off” type of attitude.
GBP/USD Video 24.08.21
On the other hand, if we see a bit of selling and break down below the 1.36 level then it is very likely that we could go looking towards 1.35 handle. The 1.35 handle has a significant amount of psychological importance built into it, and if we break down below there it is likely that we go much lower. The breaking of that level probably opens up a move down to the 1.30 handle, but I think with the Jackson Hole meeting this week you will be difficult to make that happen without the explicit suggestion by Jerome Powell that the Federal Reserve was in fact going to start tapering by the end of the year. Either way, the market needed a bounce, as we had fallen directly into major support level. That level will of course continue to be important, but it has been tested multiple times, meaning that could be chipping away at it.
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