The British pound has shot straight up in the air during the week, testing the 200 week EMA, and perhaps even more importantly the 1.3150 level which with my longer-term target. In fact, it hit that level much quicker than I anticipated, as I thought this was a story for a couple of weeks from now. That being said, the market is likely to continue to see upward momentum overall, but I would like to see some type of pullback in order to find a bit of value.
GBP/USD Video 03.08.20
That is probably something you will have to buy off of the daily candlestick, so at that point we could then push higher. Overall, this is a market that I think eventually will find a reason to go higher, but at this point in time we are a bit overdone. I simply cannot feel good about buying up here as its “chasing the trade”, something that I refuse to do. In fact, as soon as I stopped doing that, I started to become a profitable trader.
I think that the 1.30 level at the very least needs to be retested, but a move down to the 1.2750 level would also be very possible. Longer-term, this is a market that I think eventually gets its way towards the 1.35 handle and then could make an even bigger longer-term “buy-and-hold” type of move. However, we still have to deal with Brexit down the road, so I believe that the British pound still has very rocky moves ahead of it.
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