The British pound has been somewhat bullish during the week but has struggled at the 200 week EMA. This market continues to be one that is going to struggle with the idea of whether or not we get a clean Brexit, and quite frankly there are going to be plenty of headlines and drawn out there to make this as messy as possible. Because of this, I would not read too much into the candlestick other than we continue to see buyers on dips. At this point, is very difficult to trade this from a longer-term perspective, because quite frankly the Brexit seems to be a never ending issue.
GBP/USD Video 26.10.20
To the downside, the 1.2750 level offers quite a bit of support, not only on the daily chart but the fact that we have the 50 week EMA there will also cause some noise. To the upside, if we can break above the top of the candlestick for the week, then it is possible we could go looking towards 1.34 handle, but I would expect a lot of noisy trading on the way up. At this point in time, it is very difficult to trade this pair, but one would have to look at it through the prism of using small positions and simply building as the market works in your favor. I cannot tell you how many people I personally know that have had absolute heartache trading this pair of the last couple of years, and it is worth noting that we are at the top of the larger consolidation area.
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This article was originally posted on FX Empire