Overall, the market appears to be range-bound, and investors should look for key support and resistance levels, including the 1.23, 1.24, and 1.25 levels.
- The GBP/USD rallied slightly on Monday, continuing to consolidate in the same range as the past week.
- However, the 1.23 level remains a significant resistance level, and the market has formed a double top at the 1.24 level, indicating that the resistance is strong.
- Previous action suggests that the resistance may continue up to the 1.25 level, indicating that the British pound may have difficulty gaining further momentum.
The 200-Day EMA is very flat, indicating that the market is likely to remain in a consolidation mindset, and the range will stay the same. The upside appears limited, and the downside could see support near the 200-Day EMA and the 1.20 level. The 1.1850 level would also provide significant support, as seen multiple times in the recent past. It would take a significant amount of negativity to send this market down to that level. The level should be thought of as a bit of a “trapdoor trade”, meaning that if we do break down below it, the absolute bottom of this market could fall out from beneath the buyers. It’s very unlikely that the market gets there quickly unless course we get some type of fundamental shift in attitude or some type of news-related article that shocks the market.
Investors should look for signs of exhaustion to start shorting, with a focus on the moving average below, and then down to the 1.20 level. There are likely to be several obstacles above, so the market may face challenges before the British pound gains momentum. Investors should also pay attention to potential catalysts that could impact the market, including global growth, which could lead people to seek the US dollar for safety.
Overall, the market appears to be range-bound, and investors should look for key support and resistance levels, including the 1.23, 1.24, and 1.25 levels. The 200-Day EMA provides additional support, and the 1.20 and 1.1850 levels offer further significant support. If the market breaks above the 1.25 level, it could be a bullish signal, but until then, the market may face several obstacles before gaining momentum. I would anticipate more choppiness than anything else, but I think that’s probably going to be true with most Forex markets around the world as there is so much confusion.