British Pound Continues Choppy Behavior

The British pound has gone back and forth during the course of the trading session on Tuesday as we are sitting just above the 1.35 handle, and the 50 day EMA. The 200 day EMA sits just above, and as we wait for the next inflation numbers on Thursday coming out of the United States, we could continue to see a lot of back-and-forth trading. One thing is for sure, things are building up for a bigger move, but we have to wait to see whether or not that bigger move comes on Thursday, or if we simply limp into the weekend.

GBP/USD Video 09.02.22

Remember that the British pound has recently shot straight up in the air and now it looks as if people are not too sure about hanging on to it. That is an interesting turn of events considering just how volatile this move truly was. Because of this, I think short-term traders will be attracted to this market more than anything else, at least until we break out above the “squeeze” that the 200 day EMA and the 100 day EMA tends to provide. Once we escaped that area, if we go to the upside, it is likely that we go towards the 1.37 handle above where we had seen quite a bit of selling, just as a break down to the downside could open up a move down towards the 1.34 handle.

In the short term, you need to keep your position size relatively small, in order to avoid some type of major disaster or getting chopped up in a nonsensical type of market.

For a look at all of today’s economic events, check out our economic calendar.