British pound rises slowly on Tuesday
The British pound rallied during the trading session on Tuesday, reaching towards the 1.40 level. This is an area that of course is a large, round, psychologically significant number, and of course an area that has been supportive and resistive in the past. I think that if we can clear the 1.4028 level, it is a sign that the buyers have come back in and started to push this market to the upside. If that happens, the market will probably go to the 1.40 level. That’s an area that is previous resistance, and I think that it will be a bit difficult to take out.
If we were to break to a fresh, new low, the market would probably unwind to the 1.2650 level where see a significant amount of support. There is an uptrend line on the daily chart that should continue to keep this market afloat. That’s not to say you can’t short the market, on that breakdown of course. However, the move would be temporary, because I believe that the uptrend line will keep this market afloat.
As I record this, the market looks as if it is trying to break out to the upside, showing the 1.40 region as important support, and of course psychological support. I think that the market will continue to be very noisy, based mainly upon the British leaving the European Union, and of course the fact that Mark Carney recently said that the Bank of England although raising interest rates, may do so slower than many people thought.