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GBP/USD: the question of 1.33
2020-08-28 • Updated
GBP/USD rose to the critical level of 1.33. It is critical because it is a strategic resistance opening the door into the channel of 1.33-1.34. This channel has been capping the upside of GBP/USD for the last 2 years. Since Summer 2018, the British pound has never been able to step over this mark against the US dollar. Now, it is the challenge time – again.
What is the likelihood of GBP/USD to get up beyond this resistance? It entirely depends on the USD here: the GBP taken alone is weak enough, being pressed by Brexit and likely to stay under this press until the end of the year when the outcomes of Brexit are clear. That’s why, the fact that GBP/USD went up is almost 100% a result of the weakness of the USD. That’s why, whether GBP/USD will cross this 2-year resistance gets answered by “Will the USD get even weaker?”. The latter is still to be confirmed but the probability is definitely there, given the recently announced Fed policy and the coming US Presidential elections. So watch this key resistance and make sure you have a plan if GBP/USD crosses it on the way upwards.
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