The British pound has rallied a bit during the trading session on Thursday, as we continue to hang around the 1.3750 level. By bouncing from here, we show a bit of resiliency in a market that has been very strong until recently. The market has been in an uptrend for several months now, so a pullback to this area certainly is not the end of the world. The question now is whether or not we can recover completely and go back towards the 1.40 level above which has been so resistive? At this point, it seems like it is going to be very difficult to break above there but if we were to do so then I believe that this market will find reasons to reach towards the 1.42 level.
GBP/USD Video 09.04.21
The 1.42 level is an area that has been massive resistance previously, mainly on the weekly charts. Because of this, I think it is worth paying attention to and we should take a look at the breakout of that area as a huge sign that we are going to go much higher. With that being the case, I think we will see plenty of interest in the British pound at that point, but we have a lot of work to do before we get there.
If we were to break down below the area we are at right now, that could send this market down to the 1.35 handle. The 1.35 handle is a large, round, psychologically significant figure and also has the 200 day EMA approaching it, which of course is very supportive.
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