The British pound initially fell at the open on Monday, reaching down towards the 150 level. The 150 level as you can see has caused a significant amount of support, just as it has been significant resistance in the past. I believe that the market will continue to look for buying opportunities, if we can stay above that crucial level. I think that the market will continue to find resiliency in this general vicinity, but if we break down below the 149.75 level, I think that we could unwind rather significantly. I think that the market will continue to be very noisy, but it typically is.
To the upside, I suspect that the market is probably going to go looking for the 152 level above immediately, and then perhaps even the 155-level based upon the longer-term charts. Ultimately, I anticipate that there will be a lot of volatility as per usual, but I also think that if stock markets can rally, that might be just enough to push this market to the upside as it is so highly correlated to risk appetite. I think you should probably pay attention to the S&P 500, Nikkei 225, and many other indices around the world. I think that if commodities can get a boost, that could also help although this pair isn’t as highly correlated to commodities as it is overall appetite for risk. When I look at this market, to me it looks as if the value hunters coming back in, so we could see a nice move if we can hold this level.