On Monday's trading session, the GBP/USD currency pair had tight trading, going back and forth. The 1.20 level is a significant and psychologically important level that many traders will be keeping an eye on, especially since it's an area that previously had been crucial. There is also a significant amount of support going down to the 1.1850 level, which was the most recent swing low. This area is worth watching since it can lead the way for where the British pound may head next.
GBP/USD Trading Opportunities
- If the British pound breaks down below the 1.1850 level, then it's highly likely that we could see a major shot lower in the British pound.
- There is an air pocket underneath, and it opens up the possibility of a move down to the 1.15 level, which is also psychologically significant and has seen significant resistance before.
- Additionally, some traders argue that the pair is trying to form a significant "M pattern," with the double top sitting right around the 1.24 level.
The 50-Day EMA sits just above, about 100 pips higher than current trading. It's just underneath the 200-Day EMA, with both of them looking relatively flat. In this scenario, one would have to assume that those moving averages would be a significant dynamic resistance level. Thus, it's something that traders should be paying attention to. If the British pound moves above the 50-Day EMA and the 200-Day EMA, it opens up the possibility of an attempt to break above the shooting star from last week, which shows fierce resistance near the 1.2267 level.
In Summary
The British pound had tight trading on Monday, going back and forth. The 1.20 level is a significant and psychologically important level that traders will be watching. There is also significant support going down to the 1.1850 level, which is worth monitoring since it can lead the way for where the British pound may head next. Traders should be aware of the possibility of a major shot lower if the British pound breaks down below the 1.1850 level. The 50-Day EMA and the 200-Day EMA are potential dynamic resistance levels to watch. If the British pound manages to move above these levels, it may attempt to break above the shooting star from last week, which shows fierce resistance near the 1.2267 level. It's important to monitor these levels and events to make trading decisions.
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