The British pound has fallen significantly during the day on Thursday, testing a major uptrend line that should continue to keep this market somewhat lifted. If we can break down below the 1.3450 level, the market then could unwind to the 1.33 handle, then perhaps the 1.30 level after that. I believe that rallies at this point are to be thought of as suspicious, and perhaps value in the greenback. I think the 1.360 level above should continue to offer a bit of resistance, but if we were to break above that it could change the attitude of this market in the short term. I believe that rallies will give us plenty of opportunities to short this market at the first signs of exhaustion, as the US dollar continues to be lifted by the higher interest rates.

A breakdown could be rather brutal, and very sudden. Because of this, I have pending orders underneath the trend line that are simply going to sit there in cases happens while away. The market participants will continue to see a lot of volatility, but when this market finally makes up its mind, we could see a major move just waiting to happen. The market participants around the world will continue to watch the British pound with great interest, as it is testing such a vital area from the longer-term standpoint. Stay tuned, this could be one of the best trades this summer if we get some downward pressure. Again, I think every time this market rallies you need to be a bit suspicious.

GBP/USD Video 21.05.18

This article was originally posted on FX Empire

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