The British pound initially pulled back a bit during the trading session on Friday but found enough buyers underneath the 1.31 to turn around and show signs of positivity again. Early during the New York session, we got some random noise about how the French might possibly be paving the way for a compromise on fishing, which has been the latest childish rant to keep the Brexit talks off guard, so if that is going to be the case it is possible that the British pound may get a bit of a boost to go higher due to the fact that it is already leaning in that direction anyway. With that being said, I believe that buying on the dips continues to be the most obvious way to play this market.
GBP/USD Video 26.10.20
The most obvious support level is the 1.30 level, but we also have the 50 day EMA underneath the massive Wednesday candlestick that should continue to offer support as well. With that being the case, I do think that we probably try to push higher, and right now we are simply looking for some type of excuse to do so. Not only could it be fish in the English Channel, but it could be something to the effect of stimulus coming out of Washington DC. After all, DC loves to pump the markets late in the day on Friday so do not be surprised at all to see this thing continue to find resiliency.
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This article was originally posted on FX Empire