GBP/USD Price Forecast – British pound gets slammed around by Twitter yet againDuring the trading session early New York time, a headline came out on twitter that suggested the British were willing to make a compromise on the Irish border. However, that was quickly refuted so we’ve had yet another algorithmic drive higher based upon these headlines.
The British pound spiked early during the New York trading session as a twitter headline crossed the wires that the British were willing to compromise on the Irish border, which of course got the algorithmic traders in a frenzy. We gave back quite a bit of that spite, and although I think there is a case to be made for support below at the 1.30 level, to me it’s clear that the reaction had less to do with any sentiment change, and more to do with automatic trading bots. Quite frankly, I think it’s kind of humorous how the bots keep getting smoked due to these moves. However, I still think there is an upward proclivity to be had, and we should be paying attention to it.
I believe that the 1.30 level underneath continues to be important, and if we were to break down below there it would change everything. However, right now I think that there is enough buying pressure in that general vicinity that we should continue to see buyers try to take advantage of dips. Quite frankly, there was an argument to be made for buying this pair shortly before this bike anyway. That being said, I would somewhat ignore the extremely bullish candle on the hourly chart, because it was due to false headlines. I think the market was already trying to form a “higher low”, which means it was leaning to the upside anyway.