The British pound has rallied again during the trading session on Friday to break above the top of the shooting star from Thursday. We are now above both the 50 day EMA and the 200 day EMA, which of course is a bullish sign. They are starting to turn higher, and it is worth noting that we have made a fresh high at one point during the day. If we can close with a strong candlestick at all, it is very likely that this is a market ready to go higher.
GBP/USD Video 18.10.21
On the other hand, if we break down below the shooting star from Thursday, then it could drive this market down towards the 1.36 handle, where it would see quite a bit of support. Breaking down below that then opens up more of the downtrend that we had seen previously. That being said, this is a market that looks as if it is trying to figure out where to go going forward, so I think that the close for the week is going to be crucial. As I write this article, we definitely look like we are going higher, perhaps reaching towards the 1.39 level, but the daily close will be crucial as to whether or not we have signs of momentum.
The range is about the same as the previous session, and that there is more of a “risk on” attitude around the world from what I can see, so that of course will help the British pound as well. All of that being said, I would anticipate a certain amount of volatility but it looks as if the US dollar is starting to struggle a bit overall.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire