GBP/USD Signal 28/07: Drops During Previous Session (Chart)

(MENAFN- Daily Forex) Potential signal:

• I'm a seller of the British pound against the US dollar near the 1.3330 level, with a stop loss near the 1.3430 level, and a target of 1.3133 below.

The British pound has dropped fairly significantly during the trading session on Friday as we are testing a major uptrend line that has been in effect for several months. That being said, we are also hanging around the 50 Day EMA, so that could cause a bit of noise as well. Because of this, I expect that this is a market that's going to continue to be very noisy and choppy, and we do have certain decisions to make in this neighborhood.

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All that being said, it's not just the trend line that I'm watching, but it's also the 1.3350 level, because it is an area that has been technically viable as both support and resistance multiple times, so I think there is a certain amount of interest in this area if we do in fact test it. In fact, I will not be selling in this market until we break down below that level on a daily close. If we do get down below there, then it's likely that we will go looking to the 200 Day EMA, near the 1.3125 level Pound Outperforms in GeneralEURUSD Chart by TradingView

In general, the British pound has outperformed other currencies against the US dollar, as we have seen even in the major downtrend early in the year that the British pound and fall as far against the US dollar as so many other currencies did. Because of this, I think we got a situation where the British pound might be a good measuring stick as to where the US dollar is going to go. If this market starts to fall apart, it's likely that the US dollar will absently hammered other currencies like the New Zealand dollar. On the other hand, if the US dollar starts shrinking against most other currencies, then this is one of the first ones I want to be a buyer of.

All things being equal, this is a situation where we are just killing time, but you could make an argument for a potential head and shoulders be informed but we are also days away from that actually being a real thing.

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