British Pound vs US Dollar Weekly Technical Analysis
The British pound has initially pulled back during the course of the week, but then turned around to show signs of life. The 50-Week EMA is an indicator that a lot of people will be paying close attention to, and now that we are heading towards a Federal Reserve interest rate decision, it makes quite a bit of sense that we would see this market be very choppy. We did break the top of the previous candlesticks, so that of course is a bullish sign, but there’s so much noise just above that I still think you have more or less a range bound market until we get some answers from the Federal Reserve.
Looking at this chart, the 1.20 level of course offers a significant amount of support from a psychological standpoint, but we have sliced through a couple of times. In this environment, it becomes more or less a “magnet for price”, and therefore I think you have a situation where you will get a lot of choppy behavior, therefore you have to look at this through the prism of a range bound market that you have to be very quick with, so therefore it’s probably going to be difficult to trade the weekly chart itself. However, by this time next week, we should probably have a lot of answers as to where the next move is going to be.
If we were to break down below the 1.1850 level, then the British pound is going to get crushed, sending the market down to the 1.15 level. On the other hand, if we break above the 1.23 level, then we will test the double top of the 1.24 level, an area that’s going to be very difficult to get above.
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