The British pound went back and forth initially during trading on Thursday but found the area above the 1.30 level to be a bit too expensive, and therefore had to break down even further. By doing so, the market has tested the 1.29 handle, an area that has seen a lot of buying pressure recently. With that being the case, the market is likely to see a lot of back and forth, and I would also point out that there is typically a lot of support between the 50 day EMA and the 200 day EMA. In other words, as bad as this candlestick looks, there is still a lot underneath to choose through in order to truly break down.
GBP/USD Video 16.10.20
If there is one thing the last couple of years has taught me, the British pound is very difficult to trade overall. After all, the latest rumor about Brexit can send the currency racing in one direction or the other, and of course, we still have a lot of people paying attention to the possibility of stimulus coming out of the United States.
In other words, I think that we are not necessarily going to see big moves in one direction or the other and that the choppy behavior will continue to be a bit of a hindrance to putting bigger positions on. Quite frankly, we continue to see a lot of nonsense surrounding Brexit and of course the British pound overall. Because of this, short-term back-and-forth trading with what looks to be a slight upward tilt continues to be the most likely scenario.
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