- During Monday's session, the GBP/USD displayed a period of stagnation, finding itself positioned above a significant level of interest.
- Despite the market's overall bullishness, the area just below 1.2650 had previously acted as resistance.
- As we pull back to test this area, there is a possibility of buyers stepping in. Of note, the 50-Day EMA is rapidly approaching this zone, making it an area to monitor closely.
Top Forex Brokers
This market is likely to continue its upward trajectory, and one could even argue that a small bullish flag pattern is forming, presenting an opportunity for potential gains. If we break to the upside, the market could target the 1.30 level. This level holds considerable significance due to its psychological impact, historical importance, and relevance. Short-term pullbacks should be viewed as opportunities to accumulate value. While some consolidation may occur, I anticipate further upward movement. Only if we convincingly break below the 50-Day EMA could any short position gain traction.
Traders Should Remain Mindful
Considering the ongoing fight against significant inflation by the Bank of England, it is reasonable to expect continued volatility in this market. Although the outlook remains positive, noise and volatility are likely to persist. Even if we were to breach the 50-Day EMA, the 200-Day EMA might act as the next support level. Ultimately, the market is expected to attract numerous participants as it advances. While volatility is expected, the overall upward pressure remains significant and should be considered when analyzing the situation.
To conclude, during Monday's trading session, the British pound experienced a period of stagnation above a crucial level. While the market has displayed bullish tendencies, the 1.2650 below has previously acted as resistance. The current pullback presents a potential opportunity for buyers to enter the market. The proximity of the 50-Day EMA to this level adds to its significance. I anticipate a continuation of the upward trend, with the possibility of a small bullish flag pattern forming. A break to the upside could lead the market towards the 1.30 level, an area of historical importance. Short-term pullbacks are viewed as chances to accumulate value. Despite expected volatility, the Bank of England's efforts to combat inflation support the overall positive outlook. Only a decisive break below the 50-Day EMA would shift the sentiment to the downside. While volatility may persist, the market is expected to find substantial support. Traders should remain mindful of potential fluctuations while acknowledging the prevailing upward pressure in their analysis.
Ready to trade our Forex daily forecast? We’ve shortlisted the best regulated forex brokers UK in the industry for you.