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After initially breaking above the 1.30 level during the trading session on Wednesday, we pulled back pretty significantly but have formed a hammer on the hourly chart suggesting that there is still plenty of support underneath. If that’s going to be the case, it makes sense that we will look at these pullbacks as value. I see the previous downtrend line underneath as potential support, so I would anticipate that the 1.2950 level should continue to attract buyers. However, it’s obvious that we need to clear the 1.30 level significantly to feel a little bit more comfortable about going long. As long as that’s the case, I would anticipate a lot of choppy trading, but quite frankly that shouldn’t be anything new to you if you traded this pair over the last year.
We continue to see headlines drive the British pound lower, only to find buyers again. I suspect that’s the pattern that we are going to be in for some time. I think we favor the upside, and certainly historically we are at low levels, so I think that will continue to attract a certain amount of buying. As the United Kingdom leaves the European Union, in many ways they will be leaving a lot of the EU problems as well. In the longer-term, that’s going to be a good thing and the British pound should offer a nice career making trade here are relatively soon.
GBP/USD Video 04.10.18
This article was originally posted on FX Empire