BUZZ-COMMENT-At these levels, consider selling the pound
July 28 (Reuters) - GBP/USD has reached significant resistance, favouring those who sell.
Traders must be cautious about this GBP/USD rise. The trade-weighted value of sterling is not rising, making a break of major resistance less likely.
It's also worth noting, that much recent movement has been derived from risk aversion. The pound is not a safe asset, so its rise goes against the current trend .
After the euphoria of the Tories election victory last year, GBP/USD sank. It spend most of this year much lower. It's been below the peak of the weekly Ichimoku cloud, currently 1.2968, since March, and also the 200-week monthly average, which is 1.2907.
A 76.4% retracement of the drop from December's peak is 1.3020.
The 55-month moving average, which has helped to define highs since 2014, is 1.3079.
It's unlikely many traders remain short pounds. The squeeze is over, and now month-end selling is likely .
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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.