- You can see that the British Pound has been fairly quiet against the US Dollar during the trading session on Tuesday as we continue to look at the 1.34 level as a bit of a barrier.
- The question now is whether or not we can break above here and it’s not that we can’t, it’s just that since 2018 we’ve spent a majority of our time below this level.
So, I am very interested in it because I do think that if we are going to see the US dollar really start to strengthen, we could see the British pound fail here. We are starting to see US dollar strength against multiple currencies. Although in all fairness, the last major US dollar strengthening push that we had seen, the British pound held its own in relation to other currencies such as the euro or the Canadian dollar, Japanese yen, etc. So, with that being said, it might be more of a slow grind if the short idea does work out.
But keep an eye on the 1.32 level because that’s an area that should be support. And if we break down below there, the 50 day EMA ends up being a target followed by the 1.30 level.
I have no real serious interest in trying to go long of this market until we break above the 1.35 level. Because I think at that point, we start to see a change in attitude. And I think we start to see that the British pound really starts to take off. It’s been a strong move to the upside. But quite frankly, you need to work off some of that fraud. Now the question, of course, is whether or not we are going to be able to find that momentum to the upside, or if we finally fall apart.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.