Tactics and Analysis, August 10, 2017 – Volatility Creating Danger and Perspective for Pound

The Pound has remained under pressure against the U.S Dollar in early trading today. The past two days have seen the Pound taken to important support levels and it may continue to be tested. However, traders may have an opportunity to seek reversals in the coming days if geo-political tensions between North Korea and the States lessen.

Pound’s Plunge Continues

The Pound has remained under pressure in early trading today.

The 1.29 level against the U.S Dollar appears to be important short-term support.

The Pound has been taken lower in turbulent markets, which have reacted to geo-political tensions between North Korea and the States.

Signs of Profit Taking in Pound

However, traders may also be getting out of buying positions with the Pound against the U.S Dollar, which only last week saw a heightened level above 1.32 because of profit taking.

The downside pressure could be feeding into the selling frenzy the Pound has experienced the past two days as buyers’ cash out winning positions.

Reversal on the Horizon?

While the past few months have provided abrupt movements for the Pound against the U.S Dollar, a longer-term view offers an interesting perspective.

The Pound’s short-term gyrations must be considered carefully, because the Pound has shown the ability sustain gains and is still next to values not seen since the summer of 2016. Important inflation data will be coming from the U.S the today and tomorrow. If the reports are lackluster, and political tensions between North Korea and the States subsides, this could present an opportunity for the Pound to reverse after losing value the past couple of days.

In the short term, we believe the Pound may be positive. Mid-term and Long-term we are unbiased.

Yaron Mazor is a senior analyst at SuperTraderTV.

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