The British pound has initially pulled back during the trading session on Monday, but then turned around to recover. By doing so, we formed a hammer, which attracts a lot of attention for technical traders. At this point, it appears that we are trying to find some stability so that we can recover from the massive selloff. At this juncture, it is all about whether or not we have enough momentum to go higher.
GBP/USD Video 14.12.21
Looking at the chart, I do think that there is plenty of support being formed, but I think at this point in time, the market will probably continue to see upward price pressure for the short term, but the question is whether or not we can take out the 1.34 handle? In this scenario, I think that is an area where it is going to be difficult to deal with, and therefore it will be interesting to see whether or not we can get above there. If we could, then I think it is very likely that we would see this market shoot through the 1.35 level rather quickly.
To the downside, the 1.30 level underneath would be a major area of support, so if we were to give that up to the downside, then it is very likely that the British pound would fall rather hard. All things been equal, I do think that this is a market that is oversold, so a little bit of a bounce is reasonable.
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