- The British Pound has fallen after initially trying to rally on Thursday against the US dollar in a remembrance of the overall range that we have been in.
- Quite frankly, this is a market that I think is probably just sitting still until we can figure out what to do with the next set of data.
Concerns of Recession, etc.
There are a lot of concerns about the United States heading into a recession. So, the non-farm payroll number on Friday will be a big deal. With that being the case, I think you’ve got a situation where it is probably only a matter of time before we come to some type of resolution. But the 1.32 level underneath is support at the moment with 1.3425 being resistance.
As we continue to go back and forth, I think it does suggest that we’re just waiting around. Keep in mind that interest rates in America have been climbing, so it’s not quite the interest rate play that it had been over multiple years. After all, for the longest time, you would just buy the British pound and short the US dollar. If we were to close on Friday below the 1.32 level, that could be the beginning of something important, just as a close above the 1.3450 level would be.
As things stand right now, it does look bullish, but it is worth noting that the area that we have been testing has been very important in the past. So, one would assume there’s a certain amount of market memory in this neighborhood and therefore it is going to take a lot of work to break out to the upside. Friday should be volatile, but Friday should also be very informational. So, pay attention to how we close for the session.
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