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.