The British pound has fluctuated during the trading session on Wednesday, as we try to figure out what is going on in the United States. At the end of the day, it is starting to look like we get a Joe Biden presidency, but we get a counterbalance in the sense that the Republicans still hold on to the Senate. This has the dollar all over the place, as you would expect.
The market is still in the same range it has been in for some time, so we continue to look at the 1.30 level as a magnet for price. We continue to see a lot of back and forth action with the 1.29 level underneath offering support while the 1.31 level offers resistance. Furthermore, the 50-day EMA continues to be important, as it is going sideways and slicing through the candlestick. As long as the markets are completely unsure, it is likely that we continue to see a lot more of the same.
Unfortunately, the nonsense and drama does not end at just the United States. Brexit has gone nowhere, and there were quotes coming out of the European Union during the trading session that talks in the Brexit scenario still continue to be far off kilter. We almost certainly have no hope of reconciliation of the two parties. This will continue to be a problem with the British pound, so we need to be very careful about trading this market in the short term. Unfortunately, as soon as we stop messing around with the election, the next hurdle will be Brexit, which is complete nonsense and has been for years. The idea that we are going to go back to that makes the British pound toxic yet again, and we are simply trying to figure out whether or not there is going to be a solution. The later in the year we go, the more likely people start to price on another “no deal Brexit” type of situation, and the United Kingdom locking itself down will not help anything either.
