- The British pound has been back and forth during the trading session on Tuesday, as we continue to hang around the 1.29 level.
- This is an area that obviously could be important, and given enough time, I think we’ve got a situation where we are trying to reestablish the range, which is defined by just below the 1.29 level, and the 1.30 level above.
- Ultimately, this is a market that given enough time will have to make a bigger decision, but right now I think we are just simply killing time.
After all, there are a lot of questions asked about what’s going to happen with tariffs next, as Wednesday is the deadline imposed by Donald Trump to unleash a new slew of tariffs. This will have a major influence on what happens with the US dollar, and therefore a lot of traders will be watching this very closely. Ultimately, this is a very dangerous time we find ourselves in, and therefore think you need to be very cautious with your position size, just as you need to be very cautious with getting too aggressive in your entries.
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Technical Analysis
The technical analysis for this GBP/USD market is obviously somewhat neutral, as we find ourselves in a well-defined range. At this juncture, I think you have to look at this through the prism of a market that has a lot of questions asked of the Federal Reserve, and at the same time we have seen the Bank of England quite a bit more hawkish than people anticipated, at least as far as the MPC voting is concerned.
Ultimately, this is a market that I think continues to see a lot of noisy behavior, but I also think that the bullish pressure in the British pound probably continues for a while. That being said, it’s not until we break above the 1.30 level on a daily close and I think you get any real conviction to the upside. If we do break down from here, I would anticipate that the 1.2750 level is your next major support level, especially as the 50 EMA and the 200 EMA daily indicators are there.
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