The British pound was volatile during the day on Wednesday as we continue to slice around the 1.2750 region. We broke above the 1.28 level, which is a bullish sign but I think a lot of what we will see will be driven by factors that are so far from each other that we will more than likely see nothing but volatility going forward. After all, the less than impressive economic numbers coming out the United States during the early hours on Wednesday put into doubt a lot of the trading publics estimation of interest rate hikes going forward. Because of this, the US dollar suffered against all currencies, and the British pound of course was no different. However, I think that there are other things in this pair that are of note, and it’s something that you should pay attention to.
Buying on the dips? Maybe.
I believe this market will continue to be volatile, because unlike so many of the other currency pairs that I follow, the non-US dollar currency has its own issues. As you know, there is a lot of uncertainty when it comes to the United Kingdom and its future when it comes to the leaving of the European Union. With that being the case, it’s very likely that the volatility will continue in this currency, so therefore I think the only thing you can count on is a lot of choppiness. However, in the short term I believe that a move higher should send this market looking for the 1.29 level rather quickly. Alternately, if we pull back I think the 1.2750 level will offer support, but if we can break down below that level, the next target will be 1.2650. It’s going to be a very messy market.
Written by FX Empire