- The British pound has been noisy during the trading session on Thursday, as we are hanging around the crucial 1.29 level.
- This is a market that has been overdone for a while, so would not surprise me at all to see a little bit of a pullback.
- That being said, it doesn’t necessarily mean that I expect this pair to collapse or anything, but the move has been a little bit in the ridiculous genre, and I think that sooner or later we are going to have to realize that gravity is most certainly a thing.
The candlestick on Thursday shows that we are hesitating a bit, and this sets up the perfect situation for a bit of a pullback. The pullback is something that should be expected after a complete explosion to the upside like we had seen. The 1.2750 level is an area that I’d be paying close attention to, as it has been important multiple times. Just below there, we also have the 200 Day EMA offering support.
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Technical Analysis
The technical analysis for this pair is very bullish all of the sudden, but in the short term you would have to assume that there is a little bit of hesitation to start jumping in and buying at this level. That being said, if we were to pull back toward the crucial 1.2750 level, then I think we have the opportunity to buy in that area. On the other hand, if we were to break above the top of the candlestick for the trading session on Thursday, then it’s possible that we could go looking to the 1.30 level.
In general, I think this is going to remain a somewhat bullish market, due to the fact that everybody is watching US yields dropped, but at the same time, it’s a scenario where sooner or later gravity has to take some of the momentum out. Because of this, it does make a certain amount of sense that we would see a little bit of a reprieve. However, if you are patient, we should see things show themselves a little bit clearer.
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