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The British pound has initially tried to rally during the week, but the 1.40 level offered much more in the way of resistance than anticipated, and therefore it looks as if we are trying to regroup. I believe that the 1.3650 level should be massively supportive, just as the uptrend should be intact based upon the uptrend line. If we can break above the 1.43 level, then the market goes much higher. I anticipate that we will see a lot of noise between here and there, so anticipate choppiness. If we did breakdown below the uptrend line, that would be a very negative sign and send this market towards the 1.35 handle, followed by the 1.33 handle. I think that the market continues to be very choppy and difficult to deal with, but if you add slowly to a position, you may be able to ride out the storm and take advantage of the momentum. We are currently just below the impulsive move after the boat to leave the European Union, and that of course will cause a lot of market memory.
I think that given enough time, the market will continue to go towards the upside, because quite frankly historically speaking we are very cheap. The question now is whether we can build up enough momentum to do so? I think it does happen eventually but breaking above the cluster of noise that we are in is going to take quite a bit of effort, so I don’t expect a rally from here to be easy to hang onto for the longer-term, although I do anticipate it eventually presents itself.
GBP/USD Video 05.03.18
This article was originally posted on FX Empire