The Pound has put in significant gains against the U.S Dollar in the short-term. Traders may believe it has traversed to high and look for short-term
The Pound has put in significant gains against the U.S Dollar in the short-term. Traders may believe it has traversed to high and look for short-term reversals. Tomorrow the Core Consumer Price Index will be released from Britain and could have an impact of the Pound against the U.S Dollar.
The Pound experienced a fast trading day on Friday and put in solid gains against the U.S Dollar.
The British currency once again acted in a divergent manner compared to the Euro, as the Pound gained significantly before going into the weekend, while the Euro showed a more consolidated stance against the U.S Dollar.
The 1.31 level for the Pound and U.S Dollar look to be an important juncture in the short term and may continue to act as resistance. If the Pound continues to trend higher the next juncture which should be watched as resistance would be around 1.3150.
Political worries from the U.K have sparked a rather wild ride for the Pound the past two months. The British currency has seen rapid advances and rapid declines, which have been fueled by worries about the Brexit implications and its continuing negotiations.
If the Pound against the U.S Dollar begins to see weakness again, it may be because of tomorrow’s U.K inflation numbers which are on schedule. The Core Consumer Price Index will be released from Britain at 8:30 GMT on Tuesday.
The Pound’s inconsistent values over the short-term and mid-term must be weighed against its long-term trading.
The Pound has been tested around the 1.28 mark against the U.S Dollar in the recent past and if worries continue to be heard about the Brexit and political leadership of Prime Minister Theresa May’s government, it is likely downside pressure could resume.
Tomorrow’s Consumer Price Index numbers from the U.K will be important. Although the British currency has gained well against the U.S Dollar, traders may look for downside reversals on the notion the Pound is overvalued in the short-term and belief the 1.29 to 1.30 range is a more realistic price for the currency pair.
In the short term, we believe the Pound may be negative. In the mid-term and long-term we are unbiased.
Yaron Mazor is a senior analyst at SuperTraderTV.
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Yaron has been involved with the capital markets since 1998. During the past 16 years, Yaron has been a day and swing stocks trader in the American market. Yaron has founded and made successful investments into businesses spanning exciting industries – from apparel to restaurants and bars, to high tech, medical technology, and education.