The British pound rallied significantly during the trading session on Monday, and what would have been somewhat thin trading in America as the Martin Luther King Junior holiday was being celebrated. I believe that the 1.3740 level is significant support as well, so I think that it’s only a matter of time before we go higher. Eventually, we will break above the 1.38 level, and that should be a sign that we will go looking towards the 1.40 level above.

The 1.3650 level should now be massively supportive, as it was massive resistance. I believe that the US dollar is in serious trouble, and the British pound is going to be one of the major benefactors of this movement. I think that it is not until we break down below the 1.3650 level that we could be sellers. I think that the 1.40 level above is where we see the next major resistance, but I believe that this is the beginning of a major turnaround for the British pound longer term as well. In fact, I have some friends who are larger traders that are in a “buy-and-hold mode” already. If the British can get some type of decent exit agreement with the European Union, I think that the British pound will explode to the upside as it has been oversold for quite some time.

GBP/USD Video 16.01.18

This article was originally posted on FX Empire

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