- The British Pound has gone back and forth during trading here on Friday as we are testing the 200-day EMA. This is a market that I think you will have to continue to look at through the prism of negative, but bouncing from the 200-day EMA is not exactly a huge surprise, I think we could see a little bit of technical uh momentum come back into the market.
- I don't know if it sticks, but I do think you've got a situation where traders are going to at least acknowledge this indicator. A rally at this point in time probably opens up a move to the 1.34 level at best, and then we probably roll over there.
On a Move Higher
Now, if we can break above there, the 50-day EMA would be your next target, followed by 1.36. If we turn around and break below the 200-day EMA, then the 1.32 level gets targeted next. Anything below there, then I think you have serious problems with the pound. But more importantly, the US dollar will probably strengthen against almost everything. Remember, the British pound has been one of the better performers even when it was falling against the US dollar, it was falling at a slower pace than many of its contemporary. So, when you look at this chart, you can see that we are in a range that had been important back in early 2022. And the question now is, do we need to pull back in order to find value? I think that's likely. But I at this point in time still think we will go lower, just based on the way we've acted since the FOMC press conference. Remember the dollar was going to be eviscerated and we've seen a gain in the dollar of about 450 pips in this pair.
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