The GBP/USD pair initially went sideways during the day on Friday, but then collapsed as of the jobs number in America came out much stronger than anticipated. As I write this, we are currently just below the 1.29 level, and it looks as if we will probably continue to drop towards the 1.28 level underneath. That’s a level that is significantly supportive, and I should also point out that we are currently testing the previous downtrend line off the daily chart that could offer support. I think that this market will continue to be very choppy market due to headlines, so keep that in mind as well. If we were to break down below the 1.28 handle, then I feel that the market is probably easier to short, as it then would go looking for the 1.26 handle.
The market will continue to be very volatile, as the headlines will cross the wires from Brexit negotiations. That being the case, do not put too much into the market regardless of which direction you are trading, because you could suddenly find yourself behind the 8 ball as it were. This is probably going to be one of the more difficult markets to trade in the short term, and quite frankly would not be Shonda for stepping on the sidelines and waiting for a bit more in the way of clarity before putting money to work.
Written by FX Empire