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The British pound has rallied against the US dollar during the trading session on Thursday as it looks like we are trying to recover some of the losses from the Wednesday session. Either way, I've been paying close attention to the 1.3250 level underneath, which is an area where we have seen a lot of noise in the past. This is an area where there could be a lot of trouble, and therefore I think that we have a situation where we will eventually see a larger reaction.
Ultimately, the
market is one that is bullish for a multitude of reasons, but the most obvious one is that the Federal Reserve has recently cut interest rates by 50 basis points, while the Bank of England has sat still. So really, at this point in time, I think you've got a situation where traders continue to look at dips as buying opportunities, and the 1.3250 level now should have a certain amount of market memory attached to it.
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This is more likely than not going to be what a lot of technical traders going forward will be looking at to the upside. I think the 1.35 level is an area that a lot of traders will be seeing as a potential target, and it, of course, will have a significant amount of psychological resistance. So, all things being equal, I think this is a time where traders continue to look at this through the prism of whether or not they are finding value.
In other words, buying these dips. It's worth noting that we are a little bit stretched, but nothing drastic, and therefore I think we could continue to go higher. I think this will be the overall course of the market at this point, but this doesn't mean that the market is going to take off into the stratosphere, as the market has a lot of things to pay close attention to.
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