- The GBP/USD has rallied a bit during the trading session on Wednesday as the 1.15 level has offered a bit of support. It is a large, round, psychologically significant figure, so it should not be a huge surprise we bounced slightly.
- One must wonder whether we have any momentum, and I suspect that any balance is probably going to be somewhat short-lived.
- After all, this is a market that will continue to see a lot of noise, and the interest rate differential will continue to be a major driver.
- Markets don’t go in one direction forever, and it does make a certain amount of sense that there will be some fighting near this headline number.
If we break down below the 1.15 level, then we will start to threaten the hammer from last week. Breaking below that level opens the possibility of a move down to 1.1250, which is my longer-term target. The market has been so negative for so long that I just don’t have any reason to think that it is going to change anytime soon, but I also recognize that we cannot go straight down.
Selling Pressure Ahead
If we do rally from here, we need to take out the candlestick from the Tuesday session first, and then after that, we can start to talk about the 50-Day EMA and the 1.1850 level, both of which should continue to offer plenty of resistance. It’s very difficult to imagine a scenario where we suddenly take off to the upside. I think we’ve got a situation where the market is more likely than not going to continue to see plenty of selling pressure given an opportunity. After all, the US dollar remained supreme, and I just don’t see how those changes.
Furthermore, the Bank of England must worry about a slumping economy, so I do think that it probably will more likely than not favor an easy monetary policy, at least easier than the Federal Reserve will be over the next several months. As people raced toward safety, they certainly are going nowhere near the UK or Europe. The US dollar will be the asset of choice if there are a lot of concerns out there.
Ready to trade our Forex trading predictions? Here are some excellent Forex brokers to choose from.