The British pound has gone back and forth during the trading session on Friday, as we continue to test the 1.30 level. The 50 day EMA is a technical indicator that a lot of traders pay attention to, and of course the 1.30 level is an area that has been previous support, and of course should be resistance on the way back up.
GBP/USD Video 21.09.20
Furthermore, the 200 day EMA underneath has offered support, which is a longer-term indicator. At this point in time, we are essentially bouncing around between the 1.30 level and the 200 day EMA, so I think we may be looking at some type of consolidation in this area. With that being said, if we do break above the 1.3050 level on a daily close, then you could be looking at a scenario where the market is ready to go much higher. The 1.35 handle would be the target, but it is a bit questionable at this point, because Brexit will continue to bring in a lot of volatility in throw the markets around left and right.
Because of this, you need to be very cautious about your position size due to the fact that the headlines can come out at any given moment, and of course the dish pound will be thrown wildly. Because of this, a lot of traders I know have not even been bothered with the British pound, but the one thing you are trading at tend to use much smaller positions than usual. With that, caution is the most important thing you can bring to the table.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire