When you look at this chart it’s obviously in a very bullish trend so I think this consolidation normally means we’ll see a continuation.
The pound fell slightly during Friday’s trading session to close towards the lower end of the range as we continue to move back and forth. The market is likely to see a lot of push and pull as we continue to view the consolidation area as the market for the short term. That being said, the grip of 1.41 below continues to offer support, but even if we fall below it is likely that we will descend to the 1.40 level. This is an area where the 50-day EMA is located, which is also getting a lot of attention.
“Market memory” would come into play, as the previous resistance should now be support. If we break down there, then something a little more serious could be about to happen. On the other hand, if we turn around and look towards the highs, the 1.42 grip continues to offer resistance, possibly extending to the highs of the previous week. If we can erase all of this, it is likely that the pound sterling market will continue to move much higher, possibly reaching the 1.45 level.
When you look at this chart it’s obviously in a very bullish trend so I think this consolidation normally means we’ll see a continuation. That being said, it’s a market that could pull back a bit, given that it just ran into wires as the UK extends lockdowns for another year. This was announced late on Friday, so the real market reaction is unlikely to be visible until Monday. Once that happens, we may have an opportunity to see where the market is really going to go. In the current state of the charts, it certainly looks like we’re going to see buyers more often than sellers. Having that said, I have to be very careful with my levels, but I still think the uptrend is likely to stay in effect, but anything is possible out in the open after this news comes out.