GBP/USD Signal Today - 17/12: Cable Roars Higher (Chart)

(MENAFN- Daily Forex) Potential Signal:

• I am a buyer of this pair on a break above the 200 Day EMA, if it is the daily close that is above there.
• At that point, it's very likely that the GBP/USD pair will go looking to the 1.3060 level, and I would have a stop loss at the 1.2745 level.
• Between now and then, I expect a lot of noise.

• The British pound has been very strong in the early hours of Thursday, as the market continues to see a lot of volatility.
• That being said, I believe that this is a market that is trying to do everything it can to rally ahead of the Federal Reserve interest rate decision and of course the Bank of England interest rate decisions this week as well.

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A lot of people will be wondering what to do next, because we have both central banks dealing with interest rates this week, but the technical analysis presents something interesting. The 1.2750 level has been a significant barrier previously, and of course we have the 50 Day EMA and the 200 Day EMA sitting just above there, near the 1.28 level. The fact that they have frost kicks off the so-called“death cross”, which is a negative indication. However, I have found that most of the time when you get the so-called“death cross”, it's typically pretty late. The size of the candlestick on Monday is certainly something worth paying attention to, but it probably won't be until the end of the week before everything shakes out for a longer-term move.

The problem I have at the moment is that you can make a strong argument for a very flat, but you can also make a strong argument for a potential breakout. It is because of this that I do prefer the upside, assuming that a handful of factors all line up. At this point in time, unfortunately all you can do is assume that the British pound will go looking to the 1.2750 level, but whether or not it can break out is really something that will be up to Jerome Powell and the Bank of England this week.

Because of this, you have to be very cautious, but I do recognize that the US dollar is currently the strongest currency out there. While the British pound has been somewhat of an outlier at times, as it can hold its own against the US dollar, the reality is that there are still a lot of concerns that would make the dollar attractive. Because of this, the British pound is my signal for the day.

EURUSD Chart by TradingView

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