British Pound Sitting at 200 Day EMA

The British pound has initially fallen during the trading session on Monday, but there has been a major turnaround during the day as the 1.35 level has offered enough support to keep the markets afloat. That being said, there is a lot of noise just above that could cause some issues, so quite frankly I do not necessarily think that you can simply jump in and start buying. I think at this point in time you would need to clear the highs of the Thursday session to make a serious argument for going long, because this has been such a volatile mess as of late.

GBP/USD Video 14.02.22

The British pound may hold up better against the US dollar than many other currencies though, so keep that in the back of your mind. After all, the Bank of England has already started its tightening cycle, unlike many of the other major currencies. In other words, it is at least on par with the Federal Reserve. Because of this, I think this market will continue to be very choppy in general, and therefore I do not know how much money should be putting into it right now. Quite frankly, I do not trust the moves for anything more than a short-term back-and-forth type of environment in most assets, this one included.

If you are looking to take advantage of US dollar gains, you probably will be better off doing it somewhere else, against other currencies like the Australian dollar, Japanese yen, or emerging markets. The British pound is probably going to be very miserable and choppy place to be for the short term as we sort everything out.

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