- The British pound has gone back and forth during the trading session on Wednesday as we continue to see it trying to do everything it can to work off the excess.
This is a market that shot straight up in the air to reach the 1.74 region, which I think extends as resistance to the 1.75 level. Short-term pullbacks should continue to be buying opportunities, and therefore we need to look at him as such. If we were to break down below the 1.7350 level, then we could get a little bit of a correction, something that I think would only offer more value going forward.
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Canada’s Economic Situation
The Canadian economy is struggling a bit, due to the fact that housing is a major issue, but then again that’s something that’s a feature of the Canadian economy, not a bug. Ultimately, I think this is a problem that is more systemic than anything else, as the average Canadian is suffering at the hands of massive inflation. Because of this, the bank of Canada is likely to continue cutting rates, or at least doing nothing to tighten range. On the other hand, the United Kingdom has been flying high and strong for a while now, so I think we got a situation where you probably continue to see a lot of bullish pressure in the British pound.
I have no interest in shorting this pair, at least not until we break down below the 1.7150 level, which is well below the 50-Day moving average EMA. As far as a target is concerned, I do believe that we go to the 1.80 level, possibly even higher than that. Quite frankly, the British pound has been one of the better performing currencies around the world that I follow, at least as far as major ones are concerned, and therefore I think it makes quite a bit of sense that we would continue to see upward pressure. For what it is worth, the USD/CAD pair rallied as well during the day, showing that this is a Canadian dollar problem, nothing more, nothing less.
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