British pound continues to grind sideways to open the week

The British pound has gone sideways during the beginning of the week, with the 1.3650 level offering a lot of resistance, and the 1.35 level offering support, as there is an uptrend line that slices through that area. I think if we can break down below the 1.35 level, we should then go down to the 1.33 handle, perhaps even the 1.30 level as the US dollar continues to show signs of strength in general. The Bank of England looks likely to push back the timeline for interest rate hikes, and that of course has put a bit of a damper on the British pound. I think that overall, we are going to see a lot of selling given enough time. However, if we break above the 1.3650 level, the market should then go higher, as it would be a significant change of attitude.

In general, I do believe that we break down given enough time, but it is probably going to be a very noisy situation. With this in mind, I think that selling rallies continues to be the best way to play this market, or perhaps even breaking down on a daily close below the 1.35 handle. Either way, I don’t have any interest in buying this market until we break above the 1.365 level on at least a daily close, if not weekly.

GBP/USD Video 08.05.18