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MENAFN- Daily Forex) Potential signal:
I am a buyer of this pair above the 1.3660 level with a stop loss at 1.3550, and a target of 1.38. I would keep my position small due to the high probability of volatility.
The British pound initially rallied against the US dollar on Friday, and which would have been a very thin trading session as it was Independence Day in the United States, so essentially, it was just the Asian and European traders that were puttering around in the markets on what would have been the last day of the week anyway, and more likely than not will probably thinking about weekend plans. Because of this, I would not read too much into the candlestick, but I would look at the totality of the last couple of weeks in this pair to try to formulate a plan.
Top Forex Brokers1 Get Started 74% of retail CFD accounts lose money Obvious Short-term SupportEURUSD Chart by TradingView
This obvious short-term support near the 1.3550 level is based on the massive selloff that we saw on Wednesday, and the fact that it has been a little bit in the way of resistance previously. I also think of that more or less as a“zone of support” that probably extends down to the 1.35 level, followed quickly by the 50 Day EMA near the 1.3460 level. In other words, I think that if we do pull back from here, based on the selling on Friday, it should open up an opportunity to get long yet again. The British pound has been a fairly strong performer against the dollar for quite some time, and I think that pattern probably continues going forward.
If we can break above the 1.38 level, then I think you've got a situation where the British pound may go looking to the 1.40 level above, which obviously is a large, round, psychologically significant figure, and an area that probably attracts a lot of attention as it makes for good headlines. Furthermore, the bond market continues to selloff US bonds, so it's obvious that money is moving out of the US and heading to other places. The price continues with positive overall, so I have no interest in selling this pair.
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