The British pound went sideways during the session initially on Tuesday, but found enough support at the 1.30 level to continue going higher. However, later in the day we ended up seen quite a bit of bullish pressure in the US dollar, as we pulled back towards the 1.30 level. The market looks very well supportive at that area, so I think that the market should continue to go higher. However, we do not have the supportive candle necessary to start buying yet, but I still look at it as potential value that we can take advantage of.
I believe in buying dips over the longer term, and I believe that we will go looking towards the 1.31 handle again, and then beyond that. The volatility continues to be quite strong in this market, so I think that short-term trades are probably about as good as it gets. Keep in mind that the FOMC Interest Rate Decision comes out during the day, as well as the accompanying statement. Because of this, it’s likely that the market will continue to pay attention to the Federal Reserve, and today could be quite volatile because of that. If we were to break down to a fresh, new low, below the 1.2925 handle, at that point I think that the market would break down completely, and we would be looking at the start to a fresh leg lower. However, I currently believe that the market is still favoring the upside, although we have seen a bit of a pullback during the day. I have a bullish bias, but recognize that today could change everything in this pair. Expect volatility, but by the end the day there should be significant clarity to be had in this market.
Written by FX Empire