- The British pound rallied a bit during the trading session on Wednesday against the US dollar, as we are now threatening the 1.36 level this is a market that’s been very bullish for quite some time, although we did recently have a bit of a pullback.
- That pullback could offer a little bit of value, and I do think that eventually people start to look at this through the prism of trying to find value.
- The 50 Day EMA sits near the 1.3472 level and could offer dynamic support. Underneath there, we also have a massive uptrend line, followed by the 1.3350 level for support.
Technical Analysis
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The technical analysis for this market is very bullish as long as we can stay above the 1.3350 level, but I would be concerned if we were to break down below there. At that point, we could come into the 200 Day EMA, near the 1.3118 level. All things being equal, the British pound has been a strong performer against the US dollar for some time, even when we were falling, because quite frankly “the British pound was less bad than the others.” In other words, the British pound has been relatively stronger than most of his contemporaries against the greenback, so that should translate in both directions unless something specific comes out London that we need to be worried about.
If we were to pull back in reach toward the 200 Day EMA, anything underneath there would be a very negative turn of events, and we would probably see the US dollar strengthen against almost everything around the world. The British pound may fall slower than other currencies, but if the British Pound finds itself under that much pressure, it’s likely that other currencies like the Canadian dollar, Japanese yen, euro, etc. will all be struggling against the US dollar. All things being equal though, this looks like a market that’s much more likely to go higher than lower
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