Potential signal:
- if we can break above the 1.3550 level, then I’m a buyer of the British pound, aiming for the 1.38 level with a stop loss at 1.3450
The British pound has been somewhat choppy during the trading session on Tuesday, as we are sitting at the high of the Monday candlestick. At this point, the market is also testing the 50 Day EMA, so we will have to wait and see whether or not that holds as potential support. Beyond that, we also have the uptrend line that has held so far, so I think all of these things coming together offer more support than not, so at this point I think we are still very much in the uptrend that we have been in, so as long as we can stay above all of that, I think you have a situation where the market is still positive.
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Furthermore, we also have the 1.3350 level underneath there that has been important, and I will continue to look at it as a major level in the markets. If we can stay above there, then I think you still have the possibility of a market that is going sideways more than anything else, as we might be trying to work off a bit of froth from the larger move to the upside over the last several months.
Point of Inflection
I believe at this point in time we are at a major point of inflection, and we will have to wait and see how things play out here. I believe we have got a situation where we have to make a bigger decision soon, and if and when we make that decision, then I think it will be obvious as to the direction of the market. If we rally from here, then the 1.38 level is the target eventually.
If we drift through the uptrend line and do not break down below the 1.3350 level, then I think we are just going to consolidate, which is something that would not be a huge surprise during summertime. On the other hand, if we break down below the 1.3350 level, then I think you start looking toward the 200 Day EMA near the 1.31 level.
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