The British pound went back and forth during the trading session on Monday to show just how confused we are overall. The 1.30 level of course is a large, round, psychologically significant figure and an area that has been important multiple times. Because of this, the 50 day EMA is also worth paying attention to, as we are reaching towards the 1.30 level. Ultimately, this is a market that should find buyers given enough time, but I also anticipate that between Brexit and stimulus nonsense in the United States. Ultimately, this is a market that I do think find plenty of support underneath, but this is probably going to be a very messy trading situation to say the least.
GBP/USD Video 27.10.20
Looking at this chart, I do think that this is going to be more of a grind than anything else. If we were to break down below the 200 day EMA, then we could probably fall apart, but I doubt that is going to be the case anytime soon. All things being equal, you can also make an argument for a bit of an up trending channel, so that is my short-term thesis but I do recognize that we are likely to see more negativity with risk appetite than positivity, and this is why I think we grind back and forth more than anything else, looking for major support underneath.
All things being equal, we are likely to see a lot of noise in general, because quite frankly that is the way Brexit has played out over the last four years. It is simply a matter of hanging on the volatility and keep your position size relatively low.
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This article was originally posted on FX Empire