The British pound went sideways during the day on Tuesday, as we continue to see choppiness with a slightly negative bias. I think that the 1.29 level underneath should be supportive though, and as we start to get volume coming back into the market today after the American Independence Day holiday. The FOMC Meeting Minutes coming during the session can also have an influence on this market, as it will give us an idea as to how hawkish the Federal Reserve has become. The market should continue to be very choppy, as we are concerned about the negotiations between the United Kingdom and the European Union. As long as headlines continue to come out, there’s the possibility that the British pound is rapidly and without warning.
I believe that the bullish pressure should continue to be a factor, and I believe that there is support not only at the 1.29 level, but even more so at the 1.28 level underneath which is massively supportive as well, and I believe the “bottom” of the most recent impulsive move. If we break down below there, then all bets are off. However, as long as we are above this area I’m looking for supportive candles or impulsive moves to the upside to pull money to work against. I believe that a break above the 1.3050 level freeze this market to go to the 1.3450 level after that. I have no interest in shorting until we get below the 1.28 handle, but once we do I think the market will probably drop down to the 1.26 level. This of course will have to do with the Federal Reserve being more hawkish than originally thought, which could change everything going forward in the currency markets.
Written by FX Empire