- It has been fairly quiet trading on Friday, as you would expect it is Good Friday, but the British pound has managed to levitate a bit against the US dollar.
- While not particularly surprising or interesting by itself, when taken in the context of just how overbought the market is, it is somewhat interesting, and it is somewhat telling that perhaps the US dollar is going to continue to see some kind of trouble.
- We are possibly heading into consolidation above the 1.32 level.
But I do think that this is a market that is still somewhat susceptible, if you will, to the idea of a pullback in the short term. Any good news coming out of America. And then perhaps we get continuation. We'll just have to see how that plays out.
This is a 50-50 Set Up
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But right now, this is, I’d tell you 50-50 shot. We either go sideways or we do this. I don't necessarily want to short this pair on the idea that we get to pull back, but I think going long here is chasing the trade. And that, of course, is a great way to lose a lot of money. So, we don't want to do that.
The US dollar is oversold against everything. So, there is a point where the US dollar snaps back, whether it changes trend or not is kind of irrelevant. When things get overbought or oversold, they do tend to correct quite violently. Right now, though, over the last couple of candlesticks, we have formed a shooting star followed by a hammer, followed by a somewhat stagnant one for the session on Friday. So I do think we are trying to find a range, and I can make that argument in other US-related pairs as well. So perhaps that’s the more likely of two scenarios. But to shoot straight up in the air, I think, would take some type of new catalyst.
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