The British pound has initially fallen during the trading session on Wednesday, slicing through the 50 day EMA before bouncing again.
The British pound has initially fallen during the trading session on Wednesday, reaching down towards the 50 day EMA and slicing through there to reach down towards the 1.2850 level. Ultimately, the market bounced from that area where we had seen buyers previously, which was an area that I thought could cause a little bit of support. Having said that, the real reason was that Boris Johnson is now backpedaling the idea of leaving the negotiations on the October 15 deadline. Having said, there is still a lot to work through, but if we were to break above the highs from the last couple of days, the market could go looking towards the 1.3250 level. After that, then it is likely that the market would go to the 1.34 handle.
On the other hand, all it would take us some type of bad news or not this market right back down. I think we continue to see a lot of choppiness in this general vicinity, as the 1.30 level would be a bit of a magnet and perhaps attract a lot of attention anyway. With that being said, the market is likely to see a lot of choppy and volatile noise, and therefore I think it is difficult to trade the British pound in this environment. That being said, if we do get the breakout above the couple of candlesticks earlier this week, that obviously is bullish and should send this market into a much easier trade for buyers to take advantage of.
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Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.