The British pound initially fell during the trading session on Friday but gave back gains to show signs of exhaustion at the same reason. That being said, even if we do rally from here it is very likely that the 1.37 level above will offer quite a bit of resistance, possibly opening up the possibility of a “death cross” as the 50 day EMA is starting to cross below the 200 day EMA just above there. Because of this, I think it is probably only a matter of time before that starts to make headline noise in this market as well.
GBP/USD Video 11.10.21
To the downside, if we break down below the 1.36 level again, it is very likely that this is a market that will go looking towards the 1.35 level underneath, as it is a large, round, psychologically significant figure and an area where we had seen a bounce from previous days. Nonetheless, I have no interest whatsoever in trying to buy this market until we get above the 1.3750 level. With that being the case, I think that the market breaking above that level could kick off a move towards the 1.39 handle, but obviously we would need to see a significant amount of momentum come back into the market.
At this point, it does not look very likely, and with the jobs number in America looking relatively week, although it takes the idea of the Federal Reserve becoming aggressive in its tapering program a bit off the table, or at least delays it just a bit. Nonetheless, the United Kingdom has its own mess to deal with.
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This article was originally posted on FX Empire
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