- The British pound initially has shown a lot of volatility during the trading session on Monday, but it looks as if it is going to settle on some kind of sideways action.
- With this being the case, it's worth noting that we are near the 1.2850 level.
- That is an area that previously had been significant resistance.
- The area previously had been very difficult to get above. And now that we have done that, we have pulled back to test that area again.
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I think we've got a situation where if we can break above the top of the candlestick, we could go looking to the 1.30 level. In general, I do think that this is a pair that probably looks to the upside, but this is a market that has a lot to pay attention to this week, especially as we have central bank meetings coming up from the Federal Reserve, several others, including the Bank of England.
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So, GBP/USD is a pair that I think continues to be very volatile, but right now looks as if it is trying to do everything it can to continue the overall uptrend. Because of that, if we break down below the bottom of the candlestick for the day, perhaps breaking below the 1.28 level, it's really not until we get underneath air that I start to think about shorting, but even then, I'd have to see what was going on.
After all, then you have to start to ask questions about whether or not the US dollar is strengthening due to something going on in America, or if it is a concern about risk appetite in general. Furthermore, the Bank of England could say or do something to throw the markets into disarray. As things stand right now, it looks like we are trying to grind higher, and the phrase “grind” might be the best way to describe what's going on period.
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