The British pound has fallen a bit during the early hours on Wednesday, reaching towards the 1.4140 level. I think there is plenty of noise to be found in this market, but eventually I suspect that the buyers will come back.
The British pound broke down a bit during early trading on Wednesday, reaching down towards the 1.4140 level. The market has a lot of support underneath though, so I think that this pullback is probably short-term at best. Ultimately, I think that the buyers will return and continue to push the British pound higher, but we obviously have a lot of noise to chew through. I think that the 1.45 level above continues to be the longer-term target, but we obviously have a lot of noise near the 1.42 level. I think that if we continue to see buyers step in at lower levels, we will eventually break out. I think that there are a lot of concerns when it comes to the negotiations between the European Union and the United Kingdom, so that of course will influence what happens with the British pound.
I believe that the 1.40 level underneath continues to offer support, so if we can stay above there I continue to buy dips going forward. I think that ultimately the buyers will prevail, but if we were to break down below the 1.40 level, the market probably breaks down significantly from there. Longer-term, I believe that dips continue to offer value, and that is probably the best way to look at this market, offering value occasionally. Ultimately, if we get a bit of a “risk on” move in the stock markets, that could also move this market higher as it will have the US dollar selling off in general.
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.