The British pound has skyrocketed in value of the last couple of days, as headlines keep coming out that progress is being made in the Brexit deal. However, the one thing that has not come out is anything along the lines of context. This has all been done via rumor, and therefore it wouldn’t take much to shock the market back into selling off. Beyond that though, I jumping into the market here would be reckless to say the least, as we are starting to see a lot of questions being asked right at the 200 day EMA which of course a lot of longer-term traders will define the trend by.
GBP/USD Video 14.10.19
That being said, if this does end up being a longer-term trend change, you will have plenty of time to get in later, instead of chasing a market that has rallied 400 pips in two days. Unfortunately, far too many new traders will do exactly that, and then get smoked in the process.
Once Brexit is done, I would expect to see a bit of a drive higher in the British pound, but eventually we will level off and then pulled back. That will be your best buying opportunity because it will offer a multi your trade. That being said though, we are just as likely to see bad news come out and spook the market again. If that’s going to be the case, we could see the market drop 200 pips in the blink of an eye. Because of this, you need to keep your position size very small.
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This article was originally posted on FX Empire
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