- The British Pound continues to struggle as the market respects support near 1.30 and resistance around 1.32.
- Ongoing U.S. dollar strength and a looming death cross keep downward pressure in place, making short-term rallies vulnerable to selling.
The British Pound has gone back and forth during the Friday session as the market tries to determine whether it is ready to move. This market continues to view the 1.30 level as the floor and the 1.32 level above as an important barrier. Attention should also be paid to the 50-day EMA, which is getting ready to drop below the 200-day EMA, kicking off the so-called death cross, a very bearish sign. This is a longer-term signal, but one that catches headlines at times. The effectiveness of it is a question, though.
Downward Pressure and Key Levels
As things stand now, this market continues to see a lot of downward pressure, but it is at least trying to find its floor, with the 1.30 level a decent candidate. If price breaks below there, it could open a move toward the 1.2750 level. All things being equal, short-term rallies appear likely to be sold into. If the pair were to break above the 1.32 level, it could signal an attempt to turn things around, but at this point, the U.S. dollar remains strong against almost everything.
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Every time the market rallies, the British Pound looks like a potential sale. It is likely only a matter of time before the bottom falls out, as the U.S. dollar will probably strengthen against most currencies, not just the Pound.
The Pound itself is somewhat weak because the Bank of England, although holding at the last meeting, came awfully close to cutting. The market will continue to see the English as being likely to cut and therefore put downward pressure on Sterling in general.
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