- The British pound continues to go back and forth as we have seen a lot of noise in the currency markets right now and a lot of sideways action by the time you take everything into account.
- The British pound has been a little bit stronger than many other currencies as it has outperformed.
- Well, probably for the last two years against the US dollar, even though it fell, it fell less than other currencies like the euro, for example.
Now we find ourselves digesting a massive move higher as we have been going sideways for a couple of weeks. The 1.30 level above is a barrier while the 1.29 level underneath is support. We recently had the so-called Golden Cross and therefore longer term traders will assume this is a bullish market.
On a Move Higher
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If we can break above the 1.3050 level, then I think it's very likely that the British pound has much further to go, perhaps as high as 1.34. On a breakdown below the 1.2875 level, then we could see the market drop down to the 1.2750 level, possibly even the 200-day EMA. In general, I think this is a market that continues to be very noisy, but the British pound is a stronger performer in general terms than the US dollar against other currencies.
So, I think it probably has more of a lean to the upside in the short term. We'll just have to wait and see whether or not that continues here. In that situation, the market will likely to be one that outperform other currencies against the US dollar. The market will continue to pay close attention to risk appetite for currencies outside of the US, and there is a high likelihood that buyers will eventually show up again.
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