The British pound fell a bit during the trading session on Wednesday initially, showing signs of life. That being said though, I think this is more or less traders trying to collect profits after a significant move lower. This is a market that is getting a bit of relief by people being concerned about the Federal Reserve meeting coming up on Wednesday. Ultimately, this is a market that will continue to go lower longer term, but people are concerned about whether or not the Federal Reserve will be massively dovish. That could provide a bit of relief to the British pound but this should only set up a nice selling opportunity at higher levels. I think that given enough time, it’s very likely that we will continue to see a bearish pressure as the Brexit will take over the psyche of traders yet again.
GBP/USD Video 31.07.19
Currently, I believe that any bounce towards the 1.2350 level will probably offer a nice selling opportunity, with a resistance zone extending all the way towards the 1.25 level above. Because of this, I am more than willing to sell the first signs of exhaustion in that general vicinity, as it would be a continuation of what we have been seen for some time. This will be especially true if it is after the Federal Reserve announcement.
The alternate scenario of course is that we simply slice through the lows and continue to go even lower. If that’s the case, then I think we are looking at a move towards the 1.20 level which is my longer-term target in either scenario.
Please let us know what you think in the comments below
