British Pound Breaking Minor Resistance

The British pound initially pulled back just a bit during trading on Tuesday but turned around to show signs of life again. By doing so, it suggests that the British pound is ready to continue its recovery, perhaps reaching towards the 50 Day EMA. The 50 Day EMA is an area that a lot of people will be paying close attention to, as it is sloping lower and reaching a cluster that previously had been very noisy. Because of this, the markets will more than likely continue to favor a move towards that area and then perhaps some type of exhaustion.

GBP/USD Video 23.03.22

On the signs of exhaustion, I will not hesitate to short this market because of the downtrend that we have been in. That being said, I do think that we are more likely than not going to see some type of resumption of this trend. After all, trends do not change suddenly like this, although a wicked bounce is not necessarily out of the realm of possibility. In fact, it is not until we break above the 1.35 level that I would be convinced of a complete trend change, simply because of all of the potential issues around the world right now. The global risks alone make the US dollar somewhat attractive, not to mention the fact that interest rates in America are screaming higher.

On the downside, I believe that the 1.31 level could offer a little bit of support, but quite frankly I think that it would be temporary at best, we are more likely than not going to go looking towards 1.30 level if we do in fact get some type of selloff.

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