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#GBPUSD key levels were featured in our #forex market outlook this week to great effect.
The price of the major currency pair re-tested the most traded level of last week and was defended
by the buyers in the market seeing the price rally up to the key resistance of 1.3600.
Watch the video to learn more…
https://youtu.be/uiNgeb7fmCg
Hi, and welcome to this Blueberry Markets video update with me, John Kibbler, Head Currency Analyst.
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In this video, we’re going to take a look at the GB Pound. We talked about the GB Pound in the Forex Market Outlook and pointed out the key level of 1.3430, which was this nice level through here.
What we spoke about again is looking at the most traded area of last week. Typically, price tends to find support or resistance in and around this area. It’s always a good area to watch when looking for trades of the week because when the price gets down to this area, we have to ask ourselves the question: What is the most likely reaction at this point? Are we going to get a breakout to the downside, or will we find a reversal pattern and move back to the upside? What we had in here was a nice little double bottom pattern.
If I go into the 15-minute timeframe, you can see in a little bit more detail over here where we can see that the market came in and retested that structure, that level that we spoke of. It literally, hit it by or past it by a couple of pips, came back down, retested it again, broke out of this point, then came back. Where does it retest the previous structure point? The market moves on its way.
So, this level was heavily defended by those institutions because typically when we get the most traded levels of the week, the institutions are doing business in the markets. When the market comes back to this point, they will likely exit their positions or defend their positions, and this is what we saw. We saw the market defend this level in particular 1.3430. If the market does find some buyers down here, it would be great to go and target up at this 1.36 level because that’s where the market has been finding resistance lately. That’s where we’re at now.
GB Pound played out perfectly with the levels this week. We hit that 1.3430, we bounced, and the market moved up to 1.36. Now it’s asking ourselves the question, what do we do next? Because we still have the Brexit deal to come through. We don’t quite know what the full extent of that deal is just yet. However, we see a little bit of US Dollar selling off recently, which has caused this move up here. Whether that has something to do with further vaccine news and things like that, I’m not sure. However, the US Dollar we know is typically weak until the end of the year. We’ve been speaking about that for this whole month.
So, seeing that US Dollar weakness continue isn’t too much of a surprise. We’re back up at 1.36. It would be interesting to see what happens in the next couple of days here. Are we going to bounce around this area then break back towards that key level of 1.3430? Or are we going to take out these highs? If we can start trading above these highs here, then GB Pound may have a little bit further upside to go. The positive news of a deal may produce some buyers still.
I still think that we could buy the rumour and sell the news, whereas the promise of the deal caused this uptrend we’ve seen in the GB Pound recently. Now we’ve got the deal. Are we going to start seeing the market’s breakdown? But what I do know is that 1.36 and 1.3430 are two crucial levels on the GB Pound. If we were to break above 1.36, we’d need to revisit this structure here and look for the most traded level around this point, which might likely be this 1.4 area or even down towards 1.38. If it were to break 1.36, we’ve got a couple of areas to watch especially this block over here where I’d expect the market to go and retest anyway. So, keep an eye on 1.36. it is a high, big, crucial level for GB Pound. We start breaking back towards 1.3034. Maybe another buying opportunity could present itself through here.
Thanks for watching the videos updates, and I’ll speak to you soon.
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