Tactics and Analysis, July 31, 2017 – Technical Trading for the Pound

The Pound has gained plenty of value in the short-term and is testing high water marks. Traders may speculate the British currency is overvalued in the short-term and may speculate it will lose some value in the coming day.

Pound Climbs Again and Tests Highs

The Pound’s recent gains against the U.S Dollar before going into the weekend put it squarely up against important resistance levels.

The Pound is trading above the 1.31 mark and investors have complicated questions for which they will have to find answers in the short-term.

The Pound could conceivably enter a very interesting value range if it continues to build on its momentum and therefore test early summer highs from 2016. But short-term traders may have other ideas.

Bank of England on Thursday

If the Pound continues to test high water marks against the U.S Dollar, it would then be in territory it has not seen since the early days after the Brexit voting decision.

The Bank of England will meet and present its Monetary Policy Summary on Thursday which will have a direct impact on the Pound and U.S Dollar.

Important Piece of the Puzzle

While the Bank of England is obviously important for the British currency, the U.S Federal Reserve may be the most significant piece of the puzzle.

Traders may believe the Pound has gained too much value against the U.S Dollar in the short term, and may try to sell the British currency with the thought it will fall below the 1.31 mark. The Pound will likely see technical trading ranges the next couple of days as traders prepare themselves for the Bank of England, which will be followed by important data from the States on Friday regarding inflation via Wage statistics.

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

Yaron Mazor is a senior analyst at SuperTraderTV.

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