The British pound rallied significantly during the trading session on Thursday to slam into a major downtrend line that I have been tracking for a while. The market broke above the 50 day EMA, and that of course is something worth paying attention to as well. However, the 1.39 level has offered resistance yet again, and therefore I think that it is worth paying close attention to. All things been equal, this is a market that I think we pull back from these highs, but if we were to break above the 1.39 level, that would obviously kick off a whole new phase.
Bears have more opportunities today as GBP/USD hangs around the 1.1850 resistance. Momentum after a bounce from the resistance could mean a retest of the 1.3800 mid-range levels close to the 100 and 200 SMAs or a dip to the 1.3750 September support levels.
But wait! Don’t discount further pound gains just yet! Market bulls can still get some pips in if GBP/USD firmly trades above 1.1850 and heads for the 1.3940 – 1.3980 resistance zone in the next trading sessions.
On the other hand, EUR/USD: Retail trader data shows 50.48% of traders are net-long with the ratio of traders long to short at 1.02 to 1. In fact, traders have remained net-long since Aug 27 when EUR/USD traded near 1.18, price has moved 0.23% higher since then. The number of traders net-long is 8.48% higher than yesterday and 18.40% higher from last week, while the number of traders net-short is 7.94% lower than yesterday and 15.42% lower from last week.
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