GBP/USD Signal Today - 01/10: Pound Shows Support (Chart)
Date
10/1/2024 2:48:44 PM
(MENAFN- Daily Forex) Potential Signal:
I am a buyer of this market on dips, and if we get anywhere near the 1.33 level, I will get long. At that point, I would have a stop loss at the 1.32 level. Alternatively, if we get a daily close above the 1.3450 level, I'm a buyer with a stop loss at the 1.33 level. As far as a target is concerned, I am looking at the 1.37 region.
The reality is that the market continues to see a lot of volatility, but more than anything else, we are seeing a lot of support overall. After all, this is a market that has been paying close attention to the central banks around the world, noticing that the Federal Reserve of course just cut 50 basis points, while the Bank of England has set still. Because of this, the market is likely to continue to see a lot of buyers going forward, as the interest rate differential directionality certainly favors England over the United States.
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I think at this point, you should be paying close attention to the GBP/USD technical analysis , with the most obvious area of interest being the 1.3450 level above, that has offered significant resistance. If we were to break above there, it would obviously be a very bullish sign, perhaps sending the British pound much higher levels. However, if the market were to fall from here, the 1.33 level underneath should offer a significant amount of support, as it had been previous resistance, and therefore a certain amount of“market memory” would come into the picture in order to offer support.
All things being equal, the market has been a little overdone in the short term, so a little bit of a pullback certainly made a certain amount of sense. A pullback at this point does suggest that perhaps the market is trying to find value, and I think at this point in time value is what most traders will be focusing on. All things being equal, this is a market that will continue to show upward momentum as we have recently broken above the top of the bullish flag that had presented to sell previously.
A pullback at this point in time will more likely than not show plenty of support not only at the 1.33 level, but eventually the 1.31 level where the 50 Day EMA currently resides. In general, this is a market that I do think will continue to go higher over the long term.
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